5 Midcap IT Stocks Where Axis Securities Remains Positive

Axis Securities has come out with a report post the quarterly numbers of Accenture. The firm remains cautiously positive on the IT sector in the long-term. Here are some stocks it has mentioned in the report where it has given a picking order and not a categorical "buy".

Strong results from Accenture

According to Axis Securities, Accenture reported robust Q1FY23 numbers which stood in line with the street expectations. "Revenue for the quarter stood at $15.7 Bn, posting an encouraging growth of 5% YoY in USD and 15% in local currency despite rising pressures of slowdown and increasing interest rates. In line with the revenue growth, the company's operating margins grew by 20bps to 16.5%. Its EPS for Q1FY23 stood at $3.08, up 17%, beating analyst estimates of $2.91. Accenture flagged a negative impact of ~9.5% on sales from a stronger dollar. New bookings stood at strong levels of $16.2 Bn vs. $18 Bn in the last quarter. While the Consulting segment's new bookings were $8.1 Bn (50% of total new bookings), new bookings in Outsourcing were $8.1 Bn (50% of total new bookings)," Axis Securities has said.

Impact on the Indian IT services sector

Axis Securities maintains a cautiously positive long-term outlook on the sector, supported by strong investments in Digital Technologies, Cloud Transformation, IoT, As-a-Service, and Machine Learning, which will accelerate revenue growth across verticals. "However, due to the challenging macroeconomic events, the company may face difficulty in execution and see delays in automation. Moreover, the rising attrition rate would continue to remain a key concern which would delay the current automation projects further," the brokerage has said.

Midcap IT Stocks to Buy that Axis Securities has recommended

Axis Securities picking order from Mid Caps include names like Persistent Systems, LTI Mindtree, LTTS, Cyient & Zensar. From the largecap space its picking order includes name like Infosys, Tech Mahindra, TCS, HCL Tech, and Wipro.

"On the bright side, a few tailwinds such as the weakening of Rupee may offset some of the higher operating expense," the brokerage has said.

Disclaimer

The stock has been picked from the brokerage report of Axis Securities. 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.