CLSA turns cautious on IT stocks after 16% rebound
After a roughly 16% year-to-date rebound in Indian IT stocks, global brokerage CLSA has become cautious, cutting price targets and favoring selective names.
It flagged valuation de-rating and recommended selective stock-picking rather than broad buying.
Despite all the buzz about AI shaking things up, CLSA thinks those worries are overblown—client spending hasn't really changed.
What's the scoop on CLSA's selective picks?
If you're watching the tech space or thinking about investing, here's the scoop:
CLSA still likes Infosys (target: ₹1,814) and Tech Mahindra (₹1,705), hoping for a US economic bounce-back.
But HCL Tech got downgraded to 'hold' as CLSA said strong Q3 seasonality was priced into the stock and valuation de-rating warranted the move.
For faster growth potential, they're eyeing midcap names like Persistent Systems and Coforge.
Wipro's challenges continue; CLSA sees valuation de-rating risk
Wipro isn't having an easy time—CLSA kept it at 'hold' with a target of ₹237. CLSA flagged valuation de-rating for some names.
Even though company leaders expect demand to stabilize next year and a weaker rupee helps earnings for now, there are still some underlying concerns in the sector.