2 IT Stocks To Buy For Good Upside In The Short To Medium Term: ICICI Direct

As per ICICI Direct feeds on the last trading day of the calendar year there is sector specific action vigilant on the Indian stock markets with buoyancy in trade today. Broader markets are outperforming the headline indices.

Meanwhile, ICICI Direct has suggest 2 IT stocks for buying for gains in the short to medium term

Wipro:

The firm has recommended a stock on the IT major for a price target of Rs. 830 and a stop loss of Rs. 655 per share. Last the scrip traded at a price of 716.35, implying gains of 16 percent.

IT sector in an uptrend after three months of consolidation

The IT sector continues to outperform as the index has registered a breakout above the last three month's consolidation range highlighting acceleration of the up move. "Wipro remains one of our preferred picks within the IT space. It has been in a steady secular uptrend post its multi year breakout in January 2021 (Rs 388) and has remained resilient during recent market correction o The stock recently registered a breakout above the falling channel containing last 10 week's breather signalling strength and offers fresh entry opportunity. We expect the stock to continue its positive momentum and head higher towards Rs. 830 in the coming months as it is the 161.8% external retracement of the recent breather (Rs.740-604).

Fundamental view on Wipro:

Wipro is an IT service company catering to various segments like banking & insurance (~34% of revenues), consumer (~17%), energy & utilities (~12.3%), technology (~12%) & healthcare (~11.7%)

Geographically the company generates over 50 percent revenues from Americas, 30% from Europe and 11.7% from APMEA. Wipro has shown a visible improvement in performance since the appointment of CEO some time back.

The company is not shying away from acquisitions. Some of the noticeable recent acquisitions like Capco, Ampion, Edgile would help the company to strengthen its capabilities in banking, cloud transformation, cloud security and risk management, which subsequently would help it to win large deals, going forward.

Further, Wipro has maintained healthy cash flow generation and has a consistent dividend payout policy (81% in FY21).

Coforge:

Coforge has been suggested as a momentum buy for 14 days for a price target of Rs. 6010 and a stop loss of Rs. 5358 has been suggested. Last the stock traded at a price of Rs. 5896 per share. The scrip implies gains of not a major percentage.