Midcap IT stocks Coforge and Persistent Systems led gains among major technology stocks on Wednesday after CLSA favoured select mid-tier companies while turning cautious on several large IT names.
Persistent Systems rose as much as 2.47%, while Coforge gained 2.18%. The gains came after CLSA retained a High Conviction Outperform rating on both stocks, citing their stronger positioning to benefit from major technology shifts.
HCL Technologies gained 1.54%, while Oracle Financial Services Software advanced 1.34%. Infosys rose 1.09%, and Wipro gained 0.66%. Mphasis and Tech Mahindra were up 0.41% and 0.23%, respectively. TCS was largely flat.
CLSA has downgraded TCS, Infosys and Tech Mahindra to Hold from Outperform, while cutting Wipro and Mphasis to Underperform.
CLSA said the first-quarter earnings season was a mixed bag for Indian IT and global system integrators. However, it expects the technology transition to create potential winners and losers depending on management execution and the ability to adapt. The brokerage expects AI-related volumes to eventually offset the deflationary impact on legacy services, with its basic calculations suggesting this could happen by FY30.
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