Shares of these IT companies jumped and closed in the green after receiving an ‘overweight’ call from the global brokerage firm.
According to JP Morgan, Cyient ranks at the top in the overall preference in the engineering, research and development (ER&D) services space, followed by L&T Technology Services, Persistent Systems, KPIT Technologies, Tata Elxsi, and Tata Technologies.
Here are the three IT stocks for which the global brokerage firm has assigned ratings.
Cyient Limited
JP Morgan has initiated coverage on shares of Cyient Limited, with an ‘overweight’ rating and a target price of Rs. 2,600 apiece, suggesting a further upside of about 30 percent from the closing price of Rs. 2,004.85 on Wednesday.
The brokerage firm stated that Cyient has a diverse portfolio and a larger addressable market to reach. Around 80 percent of the portfolio is experiencing a robust demand, headed by the aero, telecom and sustainability.
Growing key accounts and securing longer durations and larger deals, which, along with the strong margin execution, helped to bridge the gap with its competitors.
The brokerage believes that a growing offshore mix, along with low valuations, might lead to a call for re-rating potential.
With a market capitalisation of Rs. 22,220.3 crores, the share price of Cyient Limited closed in the green on Wednesday at Rs. 2,004.85 on BSE, up by 1.6 percent.
L&T Technology Services Limited
JP Morgan has initiated coverage on shares of L&T Technology Services Limited, with an ‘overweight’ rating and a target price of Rs. 5,800 per share, representing a potential upside of about 12 percent from the closing price of Rs. 5,208.9 on Wednesday.
The share price of L&T Technology Services Limited (LTTS), a subsidiary of Larsen & Toubro Limited, moved up by 0.35 percent on NSE and closed in the green at Rs. 5,208.9 on March 20th, with a market capitalisation of Rs. 55,137 crore.
In terms of financials, the company’s revenue from operations grew by 6.64 percent QoQ from Rs. 2,386 crore in Q2 FY22-23 to Rs. 2,422 crore in Q2 FY23-24, accompanied by an increase in the net profit by around 2.07 percent QoQ, from Rs. 316 crore in Q2 FY23-24 to Rs. 337 crore in Q3 FY23-24.
The company is focused on Engineering and R&D (ER&D) services, and offers consultancy, design, development and testing services across the product and process development life cycle.
Persistent Systems Limited
Apart from the ‘overweight’ call on two companies, JP Morgan has given a ‘neutral’ rating to Persistent Systems with a target price of Rs. 7,200.
The company’s revenue from operations grew by 3.56 percent QoQ from Rs. 2,412 crore in Q2 FY22-23 to Rs. 2,498 crore in Q2 FY23-24, accompanied by an increase in the net profit by 8.74 percent from Rs. 263 crore in Q2 FY23-24 to Rs. 287 crore in Q3 FY23-24.
As of December 2023, FIIs hold 24.55 percent of the shares, whereas DIIs hold 26.13 percent of the shares in the company, aggregating to 50.68 percent of the institutional holdings.
Persistent Systems Limited offers software engineering and strategy services to assist companies in implementing and modernising their businesses.
With a market capitalization of Rs. 61,508.7, the share price of the company, moved up by 0.23 percent on BSE and closed in the green at Rs. 7,997.9 on Wednesday.
Written by Shivani Singh
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