Indian IT Stocks Retail Investors May Prefer Over TCS Right Now

Leadership uncertainty at Tata Sons, rising losses from new ventures and pressure on Tata Consultancy Services have put the entire Tata Group under a harsh spotlight. That shake up is rippling through Indian IT services and software exporters, creating pockets of pricing stress and pockets of potential mispricing. This article looks at 3 stocks from our screener that appear better positioned against this backdrop and explains what is driving that view.

The three stocks below are a starting sample. The full screen surfaced 26 more Indian IT services and software exporters with equally compelling narratives that are not covered here. To go deeper into this group, analyze and identify your highest conviction ideas directly in the Indian IT services and software exporters screener.

Tech Mahindra (NSEI:TECHM)

Tech Mahindra is a global IT services company that helps clients build and run software, modernize applications and use AI across telecom, BFSI, healthcare and other sectors. Revenue is concentrated in Information Technology Services at about ₹497.5b, with Business Process Services contributing roughly ₹94.3b, highlighting a primarily IT-led model supported by a growing BPS arm. The stock’s size is significant, with a market cap of about ₹1.45t.

Investors looking at alternatives to TCS may find Tech Mahindra worth a closer look. The company is leaning into AI platforms like TechM Orion and agentic development services, backed by recent partnerships with Cisco, Microsoft, Telefónica Germany and Viam that speak to real customer demand rather than just hype. At the same time, the P/E premium, reliance on borrowing for funding and slower projected revenue growth than the wider Indian IT sector keep the bar high for execution. The positive read through from Tata group uncertainty only matters if Tech Mahindra converts that interest into profitable, AI-led deals and sustained margin improvement, which is the real story to watch.

Tech Mahindra’s AI story is accelerating, yet the real question is how much of that promise is already in the P/E and how much risk still sits under the surface. Get the full context in the analysis report for Tech Mahindra

Build your own AI focused IT shortlist

Tech Mahindra and the other two stocks in this article all came out of the same screener, but the real edge comes when you set the rules yourself. Use our customisable Screener to mix filters like valuation, future growth, balance sheet strength and risks to suit your style, or tap into any of our curated Investing Ideas for ready made starting points.

LTM (NSEI:LTM)

LTM is a large Indian technology consulting and digital solutions company that helps global clients modernise IT systems, use cloud and AI, and run critical applications across sectors like banking, consumer, manufacturing and healthcare. Revenue is weighted to Financial Services at about ₹152.1b, with Production contributing around ₹88.7b and segment adjustments of roughly ₹199.9b, which underlines how central BFSI and industrial clients are to the business. The stock is sizable in its own right, with a market cap of about ₹1.41t.

LTM is worth a closer look if you think the Tata Group shake up will push some global IT spending away from TCS toward other large Indian exporters. The company is already tightly focused on AI led transformation through its BlueVerse ecosystem, a series of fresh alliances with players like Anthropic, Glean and Chainguard, and a push to build 1,000 AI certified engineers, all supported by a high 21.1% ROE. The flip side is a relatively full P/E, earnings growth that trails the broader Indian IT market, heavy reliance on external borrowings and lingering client concentration risk. This means the bar for execution is high and the payoff from merger synergies and big deal wins really matters.

LTM’s AI push, high 21.1% ROE and merger story could be masking where the real risk reward sits. Get the full picture in the 2 key rewards and 1 important warning sign

Mphasis (BSE:526299)

Mphasis is an IT solutions company that focuses on cloud and AI led services for clients in banking, capital markets, insurance, logistics, telecom and other sectors. Banking and Financial Services is the core engine at about ₹87.7b in revenue, followed by Technology, Media and Telecom at roughly ₹30.1b and Insurance at about ₹25.0b, with smaller contributions from Others and Logistics and Transportation. The company is a sizeable listed player in Indian IT, with a market cap of around ₹483.9b.

Mphasis sits in an interesting spot for investors who want exposure to AI heavy IT exporters without being tied to the Tata Group story. The company is leaning into AI platforms and products like Mphasis Tria and its AI Hub, while still drawing a large share of revenue from long standing BFSI and insurance relationships. That mix offers potential benefit from AI led deal flow and higher quality earnings, but it comes with real trade offs, including sector concentration, a P/E that bakes in optimism and a balance sheet funded entirely by external borrowings. The question is whether Mphasis’s push into platform and automation work can offset those risks and justify its current pricing in a world where TCS may be on the back foot.

Mphasis appears to be an AI-focused IT exporter, and its platform push could be masking where the real upside sits. Walk through how its earnings mix, sector exposure, and pricing fit together in the analysis report for Mphasis

Seeking Fresh Alternatives Beyond IT?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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