1 hr ago
Choice names Coforge, Persistent, Tech Mahindra top IT picks
Choice Institutional Equities studied several Indian technology companies.
It believes companies working in AI, cybersecurity, cloud, data and modernization may benefit from current spending.
It said banking, financial services and insurance is a relatively strong area.
The brokerage selected Coforge, Persistent Systems and Tech Mahindra as its favorite stocks.
It gave Buy ratings to Coforge and Persistent Systems.
It gave an Add rating to Tech Mahindra.
Choice also warned that AI could help companies do more work with fewer resources.
This and outcome-based pricing could make it harder for technology companies to turn spending into revenue.
It gave lower ratings to several other IT companies.
Choice Institutional Equities identified Coforge, Persistent Systems and Tech Mahindra as its top IT investment ideas.
It cited AI, cybersecurity, cloud, data and modernization as major areas driving technology spending.
The brokerage said banking, financial services and insurance remains a relatively bright spot for Indian IT companies.
Choice warned that vendor consolidation, wallet-share gains, AI productivity and outcome-based pricing could affect revenue growth.
Choice rated Coforge and Persistent Systems Buy, Tech Mahindra Add, and assigned mixed ratings to other IT companies.
- Who
- Choice Institutional Equities and the Indian IT companies it evaluated, including Coforge, Persistent Systems and Tech Mahindra.
- What
- The brokerage published preferred IT-stock picks, ratings and target prices.
- Where
- The analysis concerns Indian IT companies and the Indian market.
- When
- The article does not state when the ratings were issued.
- Why
- Choice expects technology spending in AI, cybersecurity, cloud, data and modernization to support selected vendors, while noting risks from consolidation, AI productivity and outcome-based pricing.
Reasons for optimism
Risks and constraints
Technology spending
Reasons for optimism
Choice said spending is increasingly focused on AI, cybersecurity, cloud, data and modernization, creating opportunities for vendors with relevant capabilities.
Risks and constraints
AI-led productivity gains and outcome-based pricing could limit how much of that spending converts into revenue.
Market opportunity
Reasons for optimism
The brokerage said BFSI remains a relatively bright spot and favored vendors with scale, BFSI expertise, modernization capabilities and differentiated AI offerings.
Risks and constraints
Vendor consolidation and gains in wallet share could matter more than overall growth in technology spending, potentially making competition for business tougher.
Key facts
- Top picks
- Coforge, Persistent Systems and Tech Mahindra
- Coforge
- BUY rating; target price Rs 2,050
- Persistent Systems
- BUY rating; target price Rs 6,350
- Tech Mahindra
- ADD rating; target price Rs 1,775
- Positive spending areas
- AI, cybersecurity, cloud, data and modernization
- Relatively strong segment
- Banking, financial services and insurance (BFSI)
- Other ratings
- TCS, Infosys, Wipro and HCL Technologies received REDUCE ratings; LTIMindtree received SELL
Quotes
Choice Institutional Equities
Domestic brokerage providing analysis of Indian IT companies
“Spending is increasingly skewed towards AI, cybersecurity, cloud, data and modernisation, with AI accelerating the broader technology transformation cycle.”
businesstoday.in
“Against this backdrop, we see Coforge, Persistent and Tech Mahindra as the best-positioned beneficiaries and our top investment ideas”
businesstoday.in
Sources
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