Infosys, Wipro Stocks Get 'Add' From Axis Capital, TCS, HCLTech Get 'Reduce' In 2025 Outlook

Information technology majors Infosys Ltd., Wipro Ltd. and Tech Mahindra Ltd. received 'add' rating from Axis Capital Ltd. in a note highlighting the brokerage's outlook for the IT sector in calendar year 2025.

Axis Capital, however, has issued 'reduce' rating for the stocks of sectoral bellwether Tata Consultancy Services Ltd. and HCLTech Ltd., as per the note released on Tuesday.

The brokerage has a target price of Rs 4,300 per share on TCS stock, implying a downside of 3.1% as compared to the last closing price. For HCLTech, the target was at Rs 1,800 apiece, lower by 7.1% as against the previous closing price.

Infosys received a target price of Rs 2,050, up 5.1% from the last settling price; Wipro received a target price of Rs 330, higher by 7% as compared to the market price on Tuesday; and Tech Mahindra was issued a target price of Rs 1,920 per share, implying an upside 8.8%.

Among the five tier-1 IT stocks, Tech Mahindra's earnings per share is projected to grow at the fastest pace. The company's EPS is estimated to log a compounded annual growth rate of 26.1% from fiscal 2024 to fiscal 2027, according to the note.

HCLTech's EPS is expected to rise by CAGR of 12.3%, followed by Wipro's EPS at 11.2%, TCS by 9.3%, and Infosys by 8.3%.

Among the tier-2 IT companies, Axis Capital has issued 'add' rating for Zensar Technologies Ltd. The target price was stated as Rs 740, implying a downside of 8% against the closing price on Tuesday.

The brokerage issued 'reduce' rating for LTIMindtree Ltd. and Mphasis Ltd., and 'sell' rating for Persistent Systems Ltd. and Coforge Ltd.

The target price for LTIMindtree was Rs 5,800, implying a potential downside of 12% against the last closing price. For Mphasis, the target is seen as Rs 2,850, down 10.5% from the previous close.

For Persistent Systems, the target price was Rs 3,880, implying a potential downside of 39% and for Coforge, it was stated as Rs 6,700, suggesting a downside of 26%.

In its outlook for 2025, Axis Capital said global technology majors are likely to "ride the return of growth in CY25/FY26E". The Indian IT sector, it pointed out, witnessed a significant moderation in growth from fiscal 2023 onwards, after logging a strong growth in fiscals 2021 and 2022.

"Moderation in growth may be behind us, with a combination of macro improvements on demand and better entry/exit arithmetic are likely to drive growth recovery in CY25/FY26E," it added.

The note, however, mentioned that global tech firms offer better risk-reward, as compared to their Indian counterparts.

Generative artificial intelligence could generate 20-40% savings in the software development lifecycle, the brokerage pointed out, while adding that it sees "no risk to tech spends with these savings being ploughed back into innovative tech for better business".