5 IT Stocks That Can Rally Up To 50-94%: Foreign Brokerage Macquarie Lists Preferred Picks

Foreign brokerage Macquarie has maintained positive viewpoint on 5 IT-Software stocks that can rally up to 55-94%. The brokerage has assigned outperform rating on stocks like LTIMindtree, Coforge, Persistent Systems, Birlasoft, and Mastek. These stocks are likely to rally between 55 to 94%, according to Macquarie.

Macquarie's top preferred pick among the 5 stocks remains Persistent Systems with a target price of Rs 8330 and a potential return of 94% and LTIMindtree.

"We think this is well deserved, but think that the valuations should reflect the differences in both growth rates and risks to growth. Our preference is for firms with: 1) proven client mining ability; 2) increasing offshore execution; and 3) declining top-client concentration," stated the brokerage. Check details below:

1. LTIMindtree

Macquarie remains bullish on the stock. The current market price of the stock is Rs 4311.40 apiece with an intraday gain of 1.58%. It has a market capitalisation of Rs 1,27,222.90 crore. The large cap stock declined 35% in last 1-year and 9% in last 3-months.

It has surged 126% in last 3-years and 283% in last 5-years.

According to the analyst, "We see this as a very safe choice and with broader exposure to verticals and the benefit of scale vs Persistent Systems - which is why we assign LTIMindtree a higher PEG multiple of 2 times against the 1.8 times multiple we assign for Persistent Systems."

2. Persistent Systems

The current market price of the stock is Rs 4305.80 apiece with intraday gain of 1.12%. The mid cap stock has a market capitalisation of Rs 32,902.49 crore. The stock surged 7% in last 1-week, 9% in last 1-month, 16% in last 3-months, and a little less than 1% in last 1-year.

In last 3-years, the stock rallied 510%. 52-Week high of Persistent Systems is Rs 4,950.35 and 52-week low is Rs 3,091.65.

Persistent Systems has also fixed 27 January 2023 as record date for interim dividend of Rs 28 per equity share of Rs 10 each for FY 2023.

If you buy Persistent Systems with a target price of Rs 8330, you will likely receive a potential return of 94%, according to the brokerage.

The stock is top pick of Macquarie.

3. Coforge

The current market price of Coforge is Rs 4221.00 apiece with an intraday gain of 6.42% on BSE. The stock's 52-week high is Rs 5403.25 apiece and 52-week low is Rs 3210.00 apiece, respectively.

The company has a market capitalisation of Rs 25,786.51 crore. It has also declared third interim dividend of Rs. 19/- per Equity Share of the Company the face value of Rs. l 0/- each fully paid-up, for the financial year 2022-23. It has fixed February 3, 2023 as the record date for 3rd interim dividend.

Macquarie sees a justifiable growth trend for Coforge as a result of its timely investments. "Furthermore, we view Coforge's exposure to mid-size US banks, which is one of the fastest growing market segments for India IT Services, as a key positive," Macquarie said

4. Birlasoft

Macquarie has maintained positive view on the stock. The current market price of the stock is Rs 296.05 apiece with intraday gain of 0.44%. The stock's 52-week high is Rs 519.15 apiece and 52-week low is Rs 262.30 apiece, respectively.

The small cap company has a market capitalisation of Rs 8094.61 crore. The stock surged 4% in last 3-months and witnessed a sharp dip of 41% in last 1-year. It soared over 308% in last 3-years, and 51% in last 5-years.

"Our channel checks suggest strong domain expertise in Insurance as well for Birlasoft and with a new CEO (Angan Guha) from much bigger peer Wipro, we could see a scale-up in BFSI - which is a core vertical for almost every India IT Services firm that has managed to scale up beyond $1 billion in revenue," said the brokerage.

5. Mastek

The current market price of the stock is Rs 1653.10 apiece with an intraday fall of 2.65%. The stock's 52-week high is Rs 3410.85 apiece and 52-week low is Rs 1492.00 apiece, respectively.

The company has a market capitalisation of Rs 4974.60 crore. The small cap stock fell 42% in last 1-year and 5% in last 1-month. It has gained 273% in last 3-years and 287% in last 5-years.

The Board also approved an Interim Dividend for the Financial Year ending March 31, 2023, @ of Rs. 7.00 per Equity Share (i.e. 140% of the face value of Rs. 5.00 each), which will be paid to the eligible Shareholders within 30 days. The record date is February 1, 2023.

Disclaimer

The stocks have been picked from the brokerage report of Macquarie. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.