Motilal Oswal, a leading Indian financial services group, has issued a report on the IT sector, outlining its Q3 performance and expectations for the coming year. The report highlights the sector’s resilience and recovery prospects, with LTIMindtree and Coforge emerging as top picks. Here is a summary of the main points:
* Q3 performance: The IT sector has shown robust growth, with a higher-than-expected revenue growth rate of 3.5-4.5% QoQ. This is driven by strong demand for digital transformation, cloud, and cybersecurity services.
* Recovery prospects: The sector is expected to continue its recovery trajectory, driven by growth in growth areas such as cloud, AI, and cybersecurity. Demand is expected to be driven by enterprises’ need to digitalize, adopt new technologies, and improve operational efficiency.
* Top picks: Motilal Oswal has identified LTIMindtree and Coforge as their top picks in the IT sector. Both companies are well-positioned to benefit from the growing demand for digital transformation, cloud, and cybersecurity services.
* Challenges: The sector continues to face challenges such as a tight labor market, pressure on pricing, and high competition. However, Motilal Oswal believes that the sector’s strong growth prospects outweigh these challenges.
* Outlook: The report predicts a strong recovery in the IT sector, with CY25 expected to be a revival year for the sector. The report advises investors to maintain a “buy” rating on the sector, with LTIMindtree and Coforge as top picks.