Mphasis Grabs Spotlight In Jefferies' IT Playbook As Brokerage Initiates 'Buy'
Jefferies is particularly bullish on the Indian IT sector, and has initiated a 'buy' call on Mphasis Ltd. with a target price of Rs 3,460 per share, implying a potential upside of 21% on the stock. The brokerage sees Mphasis as a prime beneficiary of the improving US economic conditions and growing demand in the Banking, Financial Services, and Insurance vertical.
With a projected 10% compound annual growth rate in constant currency revenue and 14% compound annual growth rate in earnings per share values over fiscals 2025 to 2027, the company's growth outlook shines amid a still-recovering IT sector, the brokerage said. Jefferies highlights declining US rates as a driver for the mortgage segment, a key area for Mphasis.
Jefferies finds Mphasis' valuation offering relative comfort at 30 times its price-to-earning ratio, thus leading to a compelling growth story.
Indian IT's Path To Recovery
Jefferies' broader sector view for 2025 points to a gradual recovery, supported by three major themes:
Reviving IT Budgets: After two years of subdued client spending, IT budgets are set to see a moderate uptick as enterprises prioritise modernisation, particularly in AI and cloud spaces, says Jefferies.
Long-Term Demand Drivers: Cloud services (11.6% CAGR through 2024 to 2028), AI services (18% CAGR), and offshoring trends will continue to propel the sector's structural growth, as per the note.
Cost Discipline: With fewer margin levers available, firms are doubling down on operational efficiencies, from reducing wage hikes to optimising employee pyramids. Margins are projected to expand by 50 basis points in fiscal 2026, said the brokerage.
It has issued 'buy' ratings for Infosys Ltd., Tata Consultancy Services Ltd., Coforge Ltd., Sagility India Ltd., and LTIMindtree Ltd., while maintaining a 'hold' on HCL Technologies and an 'underperform' on Tech Mahindra Ltd. and Wipro Ltd.
Jefferies recommends sticking with IT players offering strong exposure to North America and BFSI, noting these firms are better placed to deliver consistent double-digit EPS growth.
-
Indians Stay With Family, Not In Hotels | The Reason Why
India still lacks enough clean, reliable and affordable hotels for budget-conscious travellers.
-
The Economic Imperative: Analysing The Material Driving Force Behind India-Canada Strategic Reset
This economic complementarity is further reinforced by deep institutional investment ties and talent mobility, which form the bedrock of the bilateral framework.
-
Medicine Pricing: Where Must Profit Stop?
India must confront excessive margins, hidden incentives and regulatory gaps that threaten the integrity of medicine.
-
Why Amazon And Flipkart Are Struggling To Beat Meesho In India's Smaller Cities
With 274 million users and lowest-cost logistics, Meesho is defending its value commerce crown against giants like Amazon and Flipkart.
-
High US Salaries, No Green Card Certainty: The Financial Calculation Facing Indian H-1B Families
The suspension of PERM processing at eight technology employers does not cancel existing H-1B visas. What it does is force a question many Indian families have been avoiding: is the US salary worth tying your career and family plans to one employer?
-
Swiggy vs Eternal: Food Delivery's Two Rivals Are No Longer In The Same Race
Eternal is building a private AI assistant, dark.ai. Swiggy is still working out how to make Instamart pay, with an operating loss of Rs 895 crore in the July-September quarter while Blinkit stayed profitable.
-
Where You Live Shapes How You Get To Work | The Reason Why
Two-wheelers are the most popular way to get to work in India, accounting for nearly 43% of workplace commutes.
-
Unhedged Position: Can India See An Indonesia-Style Time Correction?
The Nifty is trading below levels it first clocked in 2024. Is there, then, as I have suggested in the headline, potential that the current time correction drags on painfully for the next three-five, even ten years?
-
Navigating Friction And Energy Realities: An Analysis Of Marco Rubio's October Visit To India
Occurring at a critical juncture marked by stalled trade negotiations and escalating geopolitical pressures over global energy supplies, the visit offers a profound window into modern US-India relations.
-
India Exports Capital. Why Not Export Trusteeship?
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
