5 IT Stocks To Buy For Up To 29% Returns After Nifty Index Sees Fall On YTD Basis: JP Morgan

Despite a steep correction in the IT index to the tune of 9% on a YTD basis on the Nifty IT index, leading global brokerage firm JP Morgan sees high demand for counters from the space. In a note on the Indian IT industry, the company said it sees robust demand as well as remains broadly constructive.

IT stocks with Neutral stance by JP Morgan

IT stocks	New rating	Target price
TCS	Neutral	Rs. 3800
Mindtree	Neutral	Rs. 3900
Wipro	Neutral	Rs. 580

For TCS, the company opined that the Tata group IT player has outperformed its peers and has limited upside potential on elevated COE which drives its downgrade to Neutral from Overweight.

Mindtree

The company on a year to date basis has unperformed that brings it closer to its fair value and drives upgrade to Neutral from Underweight, with target price of ₹3,900.

Wipro:

For Wipro too the global entity maintains a neutral stance and suggests a target price of Rs. 580. Over the new fiscal year, the global firm expects the company to deliver low to mid-teens organic revenue growt

 

So, here are the few Indian stocks on which the company has carried out re-rating and given out its target price:

The IT stocks on which the global research house is bullish on and maintains ‘Overweight’ call are:

IT stocks	Target price	Current market price as on February 10, 2022	Upside Potential
Infosys	Rs. 2200	Rs. 1754	25%
Mphasis	Rs. 3900	Rs. 3025	29%
Tech Mahindra	Rs. 1800	Rs. 1454	24%
HCL	Rs. 1300	Rs. 1176	11%
Larsen & Toubro Infotech	Rs. 6600	Rs. 6267	5%

"With a combination of DX/Cloud success, we expect HCL to see a strong recovery in services growth, to early teens. We expect earnings growth to rebound sharply from FY22," the note stated.

Also, for Infosys, analysts give a rationale on the rating given the improvement in growth outlook, high sustained payouts and stronger competitive positioning. In respect of L&T Infotech, the research firm sees strong revenue growth over Fy22-24 and improving margins backed by operating leverage benefits, pyramid flattening and higher offshoring.

"Overweight stance on Mphasis is owing to strong high-teens growth expectations, declining headwinds from the DXC business, continued strong deal win momentum with increased sizes and durations and stable margins, with reinvestments for growth", noted JP Morgan.

Disclaimer:

The stock recommendations are given as per the global brokerage firm's bullishness on them. Investors should exercise high caution given the high volatility.

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