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- Industry
- Geography
The IT sector is one of the most crucial sectors of the Indian industry as well as one the largest drivers of export revenue for the country. The industry currently contributes to about 7.7% of the GDP and is expected to contribute about 10% by 2025. India is currently the largest IT services provider in the world. The country has an edge primarily due to the availability of highly skilled and less costly manpower available. India is the leading sourcing destination in the world, serving about 55% of the global service sourcing market of an estimated size of USD 185-190 billion and a 38% market share of the BPM sourcing market. Tech stocks like Wipro, Infosys, TCS, and more are worth considering to invest in 2022.
Infosys Ltd is currently the 2nd largest IT service provider in India. The company is engaged in providing a wide array of IT services to clients across the globe and multiple verticals such as the US, Europe, Asia, and the rest of the world. The company is also engaged in the development of new technologies to better serve clients. The verticals it serves are BFSI, Retail & CPG, Communications, Energy & Utilities, Manufacturing, and Hi-tech. The geographical breakdown spans North America, Europe and India, and the rest of the world. Infosys is one of the best tech stocks to buy at this time.
They have changed the rating from BUY to HOLD post the Q1FY23 results and have given a target price of Rs 1510 per share. They said that there are certain pockets of weakness in retail and mortgage which will dent revenues in the longer run. In addition, lowering margin guidance is another dampener.
They have lowered the target price to Rs 2,050 from Rs 2,100 but have maintained the BUY rating on the stock. The firm said that Infosys has been outperforming peers over the past few quarters due to the ramp-up of large deals, which has been missing in the past few quarters. They see deal momentum coming back in FY23 and forecast Infosys' medium-term growth to be similar to TCS, and expect the pay-out ratio to improve gradually.
The firm has trimmed the target price from Rs 1646 to Rs 1630 posts its Q1FY23 results.
Tata Consultancy Services Ltd is the second-largest IT company in India by Market cap and the world's largest IT Services provider. The company is involved in providing a wide spectrum of services such as IT Services, Consultancy, business solutions, digital transformation, and IT products and platforms. The company is also foraying into newfound and developing technologies such as cloud-based computing, machine learning, AI, and Blockchain-based technology. TCS is one of the top tech stocks for 2023.
The brokerage firm has given a BUY call with a target price of Rs 3,650 per share. They have revised downward their earnings estimates by 0.7%-1.2%, factoring in the possibility of a US recession, lower-than-expected margin performance in Q1, and continued supply-side challenges, partially offset by the INR-USD reset.
The firm has given an ADD rating with a target price of Rs 3620 per share. In its report, the brokerage cited TCS' superior execution metrics, full-stack portfolio, and industry drivers remaining intact.
They have maintained a HOLD rating and revised the target price to Rs 3250 per share. They have cut FY23-25 EPS estimates by 1-3% due to the Q1 miss. The demand environment remains healthy in the near term. However, macro uncertainties weigh on valuations.
Wipro Ltd. (AKA Western India Products Limited) is an Indian information technology, consulting, and business process services company that utilizes robotics, analytics, cloud, and other technological advancements to help their clients spread across six continents to aid and assist them to adapt to digital trends and help them adapt and thrive towards success. Wipro is one of the best stocks to buy for future profit.
The firm has given a BUY rating with a target price of Rs 851 per share. As per the firm, Wipro has delivered strong bookings and its pipeline continues to be solid. They have cut FY23E/FY24E EPS by 4.5%/4.7% and rolled over the valuation to Q3FY24E.
The research firm has given a HOLD rating with a target price of Rs 460 per share. They expect Wipro to report USD revenue/earnings CAGR of 10 %/5% over FY2022-FY2024E. At CMP, the stock trades at an expensive valuation of 19x/17x its FY2023/FY2024 earnings estimates. They believe the company has limited margin levers to offset headwinds in the next couple of quarters.
They have given a NEUTRAL rating with a target price of Rs 390 per share. They lowered FY23/FY24 EPS by 7%/6% to factor in the margin miss. They maintained a Neutral stance as they await – further evidence of the execution of WIPRO's refreshed strategy, and a successful turnaround from its growth struggles over the last decade before turning more constructive on the stock.
