2 Large, Mid Cap IT Stocks Fall Over 14%: Motilal Oswal Sees Upside, Recommends Buy

Brokerage firm Motilal Oswal has recommended investors to buy 2 large cap and mid cap IT sector stocks for higher returns. These two stocks are Cyient Ltd and Infosys Ltd. If buy Cyient Ltd and Infosys Ltd now, you will receive maximum 25% likely return. Shares of Infosys rallied today after it declared better than expected Q3 results. Check key details below:

1. Buy Infosys Ltd

Motilal Oswal has assigned buy rating to Infosys Ltd with a target price of Rs 1760 apiece. The current market price of Infosys Ltd is Rs 1508 apiece. If you buy Infosys Ltd now, you will get potential 17% return.

The large cap stock's 52-week high is Rs 1953 apiece and 52-week low is Rs 1355 apiece. The stock is currently 10% away from its 52-week low price. It has a market capitalisation of Rs 6,34,662.75 crore.

Infosys has declined 20% in last 1-year, given return of 95% in last 3-years, and 179% return in last 5-years. The IT Software stock came into existence in 1981.

According to Motilal Oswal, "INFO reported strong 3QFY23 revenue of USD4.66b, up 2.4% QoQ in CC terms, ahead of our estimate of 1.5% QoQ CC. We expect INFO to be a key beneficiary of acceleration in IT spends. Based on our revised estimates, the stock is currently trading at 22x FY24E EPS. We value the stock at 26x FY24E EPS, implying a TP of INR1,760."

2. Buy Cyient Ltd

The analyst has given buy call to Cyient Ltd with a target price of Rs 1100 apiece. The current market price of the stock is Rs 882 apiece. If you buy Cyient Ltd now, you will get 25% likely return.

The stock is 17% away from its 52-week low price. The mid cap company has a market capitalisation of Rs 9,744 crore. The stock's 52-week high is Rs 1051 apiece and 52-week low is Rs 724 apiece, respectively. The stock has fallen 14% in last 1-year, given return of 98% in last 3-years, and 53% in last 5-years.It came into existence in 1991.

According to Motilal Oswal, "CYL reported 3QFY23 revenue growth of 13.4% QoQ in CC, largely coming through the full-quarter consolidation of Citec. We continue to see a strong rebound in ER&D spending, led by increased outsourcing and larger deal sizes. Management's plan to leverage these spends, led by a refreshed GTM strategy and increased focus on large deal wins, should bode well for its growth performance. We maintain our Buy rating on attractive valuations. Our target multiple of 16x FY24E EPS implies a TP of INR1,100, with a potential upside of 25%."

 

Disclaimer

The stocks have been picked from the brokerage report of Motilal Oswal. 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 check with certified experts before taking any investment decision.