From Financialexpress · Shivangini Gupta · · 1m 20s
Kotak backs mid-tier IT stocks over TCS, Infy
Kotak prefers Tech Mahindra, Persistent, Coforge for stronger growth over TCS and Infy.
In brief
Kotak prefers Tech Mahindra, Persistent, Coforge for stronger growth over TCS and Infy. Kotak Institutional Equities favors mid-tier IT companies like Tech Mahindra, Persistent, and Coforge for better revenue growth than large-cap peers TCS and Infosys. Originally reported by Financialexpress.
Kotak's preferred IT stocks
Kotak Institutional Equities favors mid-tier IT companies with stronger revenue growth over large-cap peers.
“We retain our preference for challengers and hybrids over incumbents”
Q3 revenue growth figures
Persistent Systems reported 20% year-on-year constant-currency revenue growth, Coforge 43%, and Tech Mahindra 7.2% in September quarter.
FY27 growth expectations
Kotak expects Persistent to lead sector growth with 19.9% organic revenue growth in FY27, followed by Coforge at 13.8%.
US tech market impact
Nvidia shares fell 4.34% after CEO Jensen Huang's reported departure, while AMD and Broadcom gained.
US tech market reaction
Nasdaq Composite fell 0.40% to 25,363.75, S&P 500 declined 0.34%, and Dow Jones fell 0.36% on Thursday.
Indian IT stock performance
TCS reported 2.8% growth, Infosys 1.5%, HCLTech 2.6%, and Wipro 0.6% in September quarter.
Kotak's growth outlook
Kotak expects Persistent and Coforge to lead sequential revenue growth in December quarter, with Tech Mahindra delivering modest growth.
Key factors for growth
Deal conversion, client spending, and employee furloughs will be critical for tracking revenue growth in coming quarters.
What it means
Kotak Institutional Equities favors mid-tier IT companies like Tech Mahindra, Persistent, and Coforge for better revenue growth than large-cap peers TCS and Infosys.
