Citi has revised its target prices for several major IT companies, reflecting a positive outlook following a significant rally in IT stocks over the past month. The updated target prices have factored in changes in exchange rates and operational parameters, as well as a re-rating in the sector.
The Nifty IT has shown strong performance, advancing in eight out of the last nine sessions and recording a 6.1% increase during this period. This surge reflects strong investor confidence and positive market sentiment toward the IT sector.
Among the top gainers, Oracle Financial Services Software Ltd. led the pack with a return of 15.7%. Persistent Systems Ltd. and Tech Mahindra Ltd. both saw gains of 9.7%, followed by Mphasis Ltd. with an 8.2% increase. LTIMindtree Ltd. also performed well, posting a 7.7% return.
Citi has revised its target price for Indegene Ltd. to Rs 540 from Rs 495. Despite the increase, the 'sell' recommendation remains unchanged, reflecting cautious optimism about the company's future performance.
The target price for Mphasis Ltd. has been increased to Rs 2,830 from Rs 2,605. Citi maintains a 'neutral' recommendation, indicating a balanced view on the stock's potential.
Citi has raised the target price for L&T Technology Services Ltd. to Rs 4,055 from Rs 3,800. The 'sell' recommendation remained unchanged, suggesting that the stock may face challenges despite the revised target.
The target price for LTIMindtree Ltd. has been revised to Rs 4,680 from Rs 4,135. However, Citi continues to recommend 'sell', indicating potential risks in the company's outlook.
Citi has increased the target price for Tech Mahindra Ltd. to Rs 1,430 from Rs 1,265, with the 'sell' recommendation remaining unchanged.
The target price for HCL Technologies Ltd. has been revised to Rs 1,690 from Rs 1,510. Citi maintains a 'neutral' recommendation, suggesting a balanced view on the stock's prospects.
Citi has raised the target price for Tata Consultancy Services Ltd. to Rs 3,245 from Rs 3,000. Despite the increase, the brokerage retained a 'sell' recommendation.
The target price for Wipro Ltd. has been increased to Rs 235 from Rs 215. Citi continues to recommend 'sell'.
Citi has revised the target price for Infosys Ltd. to Rs 1,645 from Rs 1,525. It kept the 'neutral' recommendation, indicating a balanced view on the stock's potential.
The target price for Persistent Systems Ltd. has been raised to Rs 5,045 from Rs 4,365. Citi maintains a 'sell' recommendation, suggesting potential risks in the company's outlook.
Citi has increased the target price for Coforge Ltd. to Rs 1,715 from Rs 1,432. Despite the hike, the 'sell' recommendation remained unchanged.
Citi's analysis indicates that the recent re-rating in the IT sector has led to an upward revision of target prices for these companies. Despite the positive outlook, the brokerage has maintained its recommendations for each stock, with several companies still rated as 'sell' or 'neutral'.
The IT sector has experienced a notable rally in the last month, driven by strong performance and positive market sentiment. This has prompted Citi to adjust its estimates for FY26E-27E, reflecting the improved operational parameters and exchange rate changes.
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