Synopsis:
Citi has cut target prices across leading IT firms while maintaining a cautious stance on the sector. TCS, Persistent Systems, and LTTS remain “Sell” calls with notable downside potential, while Infosys and HCL are rated “Neutral.” Hexaware stands out as a “Buy” with strong upside prospects.
India’s information technology sector remains under watch as Citi has revised its stance on several leading firms, cutting target prices amid expectations of near-term challenges in growth and margins. The brokerage maintained cautious ratings on most players, with only selective buys, signaling a mixed outlook for the industry.
1. Tata Consultancy Services Ltd
Tata Consultancy Services is a global leader in IT services, consulting, and business solutions. For more than five decades, the company has been partnering with some of the world’s largest enterprises to drive digital transformation. TCS offers an integrated portfolio of business, technology, and engineering solutions that is powered by consulting and cognitive technologies.
The company has a market capitalization of Rs. 11,07,858.40 crore and is currently trading at Rs. 3,060. Citi has maintained its “Sell” rating while lowering the target price to Rs. 2,850 from Rs. 3,135, implying a potential downside of 7.6 percent from the current levels.
2. Hexaware Technologies Ltd
Hexaware Technologies is a global technology and business process services firm with a mission to create value and enhance customer experiences by combining people and technology. With operations spread across multiple countries, the company partners with enterprises to accelerate digital transformation, optimize business processes, and build resilient IT systems at scale and speed.
Hexaware has a market capitalization of Rs. 45,674.64 crore and its stock is trading at Rs. 751. Citi has reiterated its “Buy” call on the stock but trimmed the target price to Rs. 860 from Rs. 890, suggesting a potential upside of 14.49 percent from the current price.
3. Persistent Systems Ltd
Persistent Systems specializes in software engineering and strategic consulting to help businesses modernize operations and adopt digital solutions. The company develops its own software and frameworks with pre-built integrations and has strong alliances with technology providers such as Salesforce and Amazon Web Services (AWS).
The company commands a market capitalization of Rs. 82,586 crore and is trading at Rs. 5,274. Citi has maintained a “Sell” rating on the stock and cut its target price to Rs. 4,705 from Rs. 4,980, pointing to a potential downside of 10.79 percent from the current market price.
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4. L&T Technology Services Ltd
L&T Technology Services, incorporated in 2012, is an engineering research and development (ER&D) services provider that caters to industries such as transportation, industrial products, telecom, hi-tech, medical devices, and plant engineering. Its clientele includes 69 Fortune 500 firms and 53 of the world’s top ER&D companies, and it also provides digital engineering advisory services.
The company has a market capitalization of Rs. 44,429.01 crore and is currently trading at Rs. 4,209. Citi has kept its “Sell” rating intact and lowered the target price to Rs. 3,735 from Rs. 4,015, indicating a potential downside of 11.25 percent from current levels.
5. Infosys Ltd
Infosys is a global IT services provider specializing in consulting, outsourcing, and next-generation digital solutions. The company plays a significant role in helping enterprises execute digital transformation through software development, IT consulting, cloud adoption, artificial intelligence, and continuous innovation.
Infosys has a market capitalization of Rs. 6,15,179.15 crore and its stock is trading at Rs. 1,480. Citi has maintained its “Neutral” stance while cutting the target price to Rs. 1,515 from Rs. 1,660, leaving a modest potential upside of 2.36 percent from the current level.
6. HCL Technologies Ltd
HCL Technologies delivers a wide spectrum of software and IT infrastructure services. Its offerings span IT infrastructure management, cloud solutions, cybersecurity, digital analytics, IoT, and engineering R&D. The company’s diversified client base extends across industries such as financial services, telecom, healthcare, automotive, manufacturing, and energy.
The company has a market capitalization of Rs. 4,01,351.07 crore and trades at Rs. 1,477. Citi has reiterated its “Neutral” rating while reducing the target price to Rs. 1,510 from Rs. 1,650, suggesting a limited potential upside of 2.23 percent from the current market price.
Written by -Manan Gangwar
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