IT stocks gain on back of Accenture's strong Q2 results; brokerages see up to 38% return in TCS, Infosys, Wipro and HCL tech

IT stocks were in action on Monday as they gained between 1-2%, tracking Accenture's second-quarter results. US technology Accenture has posted strong second-quarter results and has increased its growth guidance for FY22 (August end) and provided revenue guidance from 19-22% to 24.26%. Accenture reported a 24% revenue growth to $15 billion while the net income for the quarter was $1.66 billion, up 13.7% YoY. It also reported record new bookings of $19.6 billion, up 22% YoY. 

Global brokerages have been bullish on IT stocks and have largely maintained ratings and revised target price in many stocks. They believe strong order book and guidance increase will help IT shares going forward.  

Speaking of outlook in IT space, Morgan Stanley said a guidance increase for FY22 amid current macro volatility provides comfort around resilience in spends.  

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It is of the view that slowdown in outsourcing booking & tighter margin guidance comparatively shows that supply-side challenges were offsets, which should be seen as positive sentiment.  

Goldman Sachs reiterated buy on Infosys and TCS saying sentiments remain positive for Indian IT companies. "Strong order book & upward revision in guidance augur well for IT stocks," it added.  

At 9.35 am, TCS shares were trading with gains of Rs 29 to 3704 a share, while Infosys was up Rs 25.30 or 1.36% to Rs 1879.70 per share on the BSE.  

Credit Suisse on IT stocks 

The brokerage maintained outperform rating for Infosys with target price of Rs 2350 a share, which translates into an upside of 26% on Thursday's closing price of Rs 1855 per share.  

Maintaining neutral target for IT major Wipro, Credit Suisse sees this IT stock hitting a target price of Rs 700 in one year. It comes out to be 16% return on Thursday's closing price of Rs 601 per share in 12 months. The scrip was trading with a gain of 2% or Rs 12 to 613 per share on the BSE.  

Credit Suisse also maintained an outperform rating on HCL Tech with target price of Rs 1650. On Thursday's closing price of HCL Tech shares at Rs 1197, it is a yield of 38% in one year.  

Maintaining Outperform rating, Credit Suisse target price for TCS in one year is Rs 4600 per share. This is an upside of 25% on TCS closing price of Rs 3673 a share on Thursday.  

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)