Coforge tops the chart with 26% returns in the past three months and is followed by largecaps LTIMindtree (20%) and Infosys (18%). HCL Technologies, Persistent Systems, Tech Mahindra and Mphasis have delivered double-digit numbers between 18% and 12%.
TCS and L&T Technology Services (LTTS) have yielded over 7% and 2%, respectively. Meanwhile, Wipro has seen its share price erode by 1.5%.
With the exception of LTTS and Wipro, the rest have outperformed the broader Nifty index, whose returns in the same period stand at 3.3%.
The only sector that has done better than IT is pharma with Nifty Pharma posting 17% growth in the last three months.
As the Q2FY25 earnings season begins today with the announcement of Tata Consultancy Services’ (TCS’) results, there are 13 stocks in contention of top brokerages and among them Infosys, HCL Technologies, LTIMindtree Coforge and Persistent Systems are most preferred picks. Rategain Travel Technologies and recently listed TBO Tek are among new age tech stocks that have also been picked by a brokerage.
TBO Tek, which was listed in May this year, has rallied 24% since then.
Q2FY25 preview
Indian IT companies are expected to report a single-digit revenue growth aggregating up to 4% in the quarter that ended on September 30, 2024 with the likelihood of positive commentary for the rest of FY25.
The sector is coming out of a severe trough cycle and the recovery could be far sharper than expected, BNP Paribas said in a brokerage note. Over the last decade, companies have delivered high-single-digit revenue growth during the usual cyclical recoveries and it could be the same this time around, BNP said, summing-up the current trends in Mark Twain’s words – “History doesn’t repeat itself, but it often rhymes”.
Meanwhile, India’s leading IT software company reported a 5% year-on-year (YoY) growth in its consolidated net profit, reaching Rs 11,909 crore for the second quarter ended September 2024, compared to Rs 11,342 crore in the year-ago period. The profit was lower than the Street’s estimate of Rs 12,450 crore.
The consolidated revenue for the reported quarter stood at Rs 64,259 crore, which was higher by 7.6% on the YoY basis while rising 5.5% YoY in Constant Currency terms.
Also Read: TCS declares second interim dividend of Rs 10/share, sets October 18 as record date
Brokeragesβ take on stocks
Axis Securities | KPIT Technologies, Persistent Systems, Coforge, Infosys are positive plays while smallcap SIS is a negative play.
BNP Paribas | Top picks are Infosys and HCL Tech followed by TCS and LTIM. In midcaps, Persistent is its top bet.
JM Financial | Infosys, Tech Mahindra and Wipro are preferred largecap picks while Persistent Systems and KPIT are among top midcap bets.
PhillipCapital | This brokerage remains positive on Infosys, LTIMindtree, HCL Tech in Tier I category while picking Persistent, Coforge, KPIT Tech in Tier II and Rategain, TBO Tek in new age tech companies.
Nuvama Institutional Equities | LTIMindtree, Infosys, Persistent, Mphasis, Coforge, TCS and HCL Tech remain its preferred bets this earnings season.
Sharekhan | TCS, Infosys, HCLTech, LTIM and Tech Mahindra are preferred largecap picks while Persistent Systems, Coforge and Mastek among top midcap bets.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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