2 Large Cap Stocks From IT Sector Picked By BoB Capital With Buy, Hold Call

BoB Capital has picked two large-cap IT sector stocks, namely Infosys Ltd. (INFO) and Tech Mahindra (TECHM), with "Buy" and "Hold" calls. The brokerage has assigned attractive target prices to the stocks for decent gains up to 18% in the near term. Check below to know more:

Buy - Infosys Ltd. (INFO)

The brokerage has assigned a "buy" on the stock of INFO with a target price of Rs 1,760 apiece. It sees a potential upside of 18% from its current level. On the NSE, the current price of the stock is Rs 1,476.70 apiece, trading down 1.29% from its previous close.

The stock opened today at Rs. 1,485 apiece, while its previous close was Rs. 1,496.05 apiece. The stock's 52 week low is Rs 1,355 apiece and its 52-week high is Rs 1,923.30 apiece.

The stock has continuously fallen in the last 1 year. It has fallen 4.75% in 1 week, 6.74% in 1 month, 9.82% in 3 months and 13.26% in 1 year, respectively. However, it gave 99.31% positive returns in 3 years and 154.49% positive returns in 5 years, respectively.

Buy INFO for a target price of Rs 1,760

According to the brokerage, The stock is trading at 20.7x/17.6x FY24E/FY25E EPS. Despite INFO's cautious outlook on a few verticals, we believe its strength in managing the twin journeys of digital transformation (Cobalt) and cost takeout will drive growth leadership. "We retain BUY and continue to value the stock at 20.5x FY25E EPS, translating to an unchanged TP of Rs 1,760," the brokerage said.

Hold - Tech Mahindra Ltd. (TECHM)

The brokerage has assigned a "Hold" on the stock of TECHM with a target price of Rs 1,160 apiece, implying up to 3% upside. The stock is currently trading at Rs 1,111.35 apiece on NSE, 1.38% down from its previous close of Rs 1,126.90 apiece.

Today, the stock opened at Rs 1,120 apiece, while, the previous close was 1,126.90 apiece. Its 52 week low is Rs 943.70 apiece and 52 week high is Rs 1,574.95 apiece, respectively.

The stock has given 10.39% positive return in 1 month, however, it has fallen 0.58% in 1 week. Whereas, in the past 1 year, it has fallen 19.51%. In 3 years it gave 50.74% positive return and 83.41% positive return in 5 years, respectively.

Hold TECHM for a target price of Rs 1,160 apiece

BoB Capital said, "The stock is trading at 14.1x/11.9x FY24E/FY25E EPS. In its quarterly earnings commentary, TECHM indicated that it was unlikely to meet its operating margin guidance of 14% for FY23. Moreover, we believe that portfolio rationalisation will continue in H2FY23, impacting revenue in the near term. Given the subdued revenue and margin outlook, we retain HOLD and continue to value the stock at 12.5x FY25E EPS - ~20% discount to WPRO considering the overhang from sluggish 5G rollout - for an unchanged TP of Rs 1,160."

Disclaimer

The stocks have been picked from the brokerage report of BoB Capital. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.