The brokerage has also retained an ‘Outperform’ rating on Infosys, Tech Mahindra, Tata Consultancy Services, and LTIMindtree.
Meanwhile, it has a ‘Hold’ rating on HCL Technologies and Wipro.
| Cos | Ratings | TP(₹) | Upside/Downside |
|---|---|---|---|
| Persistent Systems | HC Outperform | 8,058 | +77.6% |
| Coforge | HC Outperform | 2,278 | +112.5% |
| Infosys | Outperform | 1,653 | +34% |
| Tech Mahindra | Outperform | 1,698 | +26.4% |
| TCS | Outperform | 3,333 | +39.5% |
| LTIMindtree | Outperform | 6,304 | +50% |
| HCLTech | Hold | 1,506 | +14% |
| Wipro | Hold | 218 | +14% |
CLSA said the IT services sector appears attractive on a risk-reward basis.
In its note, based on discussions with TCS, Infosys, HCL Technologies, and Wipro ahead of the silent period, the brokerage said it found no evidence of increased pricing pressure in renewed contracts due to the latest artificial intelligence tools from Anthropic and OpenAI.
On the demand front, BFSI continues to see strong momentum across companies. Technology spending remains healthy for HCL Technologies and TCS, while retail, auto, and healthcare segments continue to remain soft.
Some companies have flagged a slight delay in client decision-making, partly due to the need to evaluate new AI tools and also due to the ongoing Middle East crisis.
While direct revenue exposure to the Middle East remains in low single digits for these companies, the broader macro impact will depend on how long the crisis persists.
The brokerage added that deal pipelines remain strong and valuations for Indian IT companies are currently around their 10-year average, making the sector attractive from a risk-reward perspective.
