Refile: BUZZ-Indian IT stocks' run-up ahead of Q1 sets "higher bar on beats", says JPM

KPIT Technologies

04/07/2024 07:57

(Adds source in healdine)
    ** Indian IT stocks  .NIFTYIT  have outperformed the Nifty
50  .NSEI  by 10% over the last month, says JP Morgan 
    ** JPM notes IT stocks are trading at upper end of valuation
bands, building hopes for better prints, bottoming earnings
    ** "The recent rally means (Q1) misses/meets could be faded
significantly and there is a higher bar on beats"
    ** Still JPM expects "minor improvement" in Q1 due to large
deals, seasonal strength; does not expect forecast upgrades
    ** Expect growth improvement in large-caps, led by 2% growth
in Infosys  INFY.NS  and LTI Mindtree  LTIM.NS 
    ** Expects TCS  TCS.NS  margins to contract due to wage
hikes and INFY's to sharply expand on client provision reversal
    ** Says mid-caps to show greater growth disparity, margin
decline
    ** JPM's top picks: Infosys, TCS, LTI Mindtree, Persistent
Systems  PERS.NS  and KPIT Technologies  KPIE.NS 
    ** Top avoids: Wipro  WIPR.NS , Tech Mahindra  TEML.NS ,
Cyient  CYIE.NS , Mphasis  MBFL.NS  and Coforge  COFO.NS 

 (Reporting by Hritam Mukherjee in Bengaluru)
 ((Hritam.Mukherjee@thomsonreuters.com;))