CLSA has an “outperform” rating on both Infosys and Wipro, with a price target of ₹1,861 and ₹300 respectively, which implies an upside potential of 15% each for both the stocks.
In its note on Thursday, June 19, CLSA has highlighted that Infosys shares may see a sharp rebound in case it announces the closure of two of its acquisitions, which could lift its full year revenue growth guidance, which is currently between 0% and 3%.
Infosys had announced the closure of the acquisition of a leading cybersecurity services provider, The Missing Link in May this year. It had also announced the acquisition of a leading consulting company, MRE Consulting, in April, and had mentioned that the transaction is likely to close in the first quarter of the current financial year.
The brokerage has also noted a similar scenario for Wipro, whose shares could see a sharp rebound, in case it plans to announce a buyback of its equity shares, along with its results.
Wipro had last carried out a buyback of its equity shares in June 2023.
CLSA retained its positive stance on the India IT sector, as it anticipates a strong pick-up in order bookings and good deal pipeline-related commentary. “Strong order bookings this quarter, should bode well for recurring revenue in the future,” the CLSA note said.
Infosys, Tech Mahindra and Persistent Systems have been highlighted by CLSA, as its top picks within the sector.
Out of the 49 analysts that have coverage on Infosys, 35 of them have a “buy” rating, 12 say “hold”, while two have a “sell” recommendation.
Out of the 46 analysts that have coverage on Wipro, 21 of them have a “sell” rating on the stock, 16 of the say “hold”, while nine have a “buy” recommendation.
Shares of Infosys are trading 0.9% lower on Thursday at ₹1,617.5. Wipro’s shares are off opening highs, currently trading 0.6% higher at ₹263.1.
