CLSA says a new tech cycle led by AI will benefit Indian IT — Check its top picks

Brokerage firm CLSA on Tuesday, March 11, said it is bullish on the IT sector, particularly on Persistent Systems Ltd., as it projected an upside of 79% on the stock from its previous day’s closing price.Persistent Systems was added to CLSA’s “high-conviction outperform” list with a price target of ₹9,267. The price target implies a potential upside of 79% from Monday’s closing price.
Apart from Persistent Systems, CLSA also said that TCS is among its top picks. It has an “outperform” rating on TCS with a price target of ₹4,546, which implies a potential upside of 27% from Monday’s close.
CLSA said it generative artificial intelligence (AI) has the potential to transform human lives. It sees AI sparking a new tech cycle, significantly benefitting Indian IT services firms.
Based on a proprietary framework that evaluates total addressable market, revenue, productivity gains, use cases and implementation, it identifies data cloud, cybersecurity, SaaS and automation as areas poised to do well going forward.

Of the 40 analysts that have coverage on Persistent Systems, 18 have a “buy” rating, nine have a “hold” rating and 13 have a “sell” rating. Meanwhile, 48 analysts have coverage on TCS. Of these, 33 have a “buy” rating, 10 have a “hold” rating and five have a “sell” rating.

Persistent Systems shares were trading 0.88% higher at ₹5,212.5 apiece, while TCS shares were down 0.55% at ₹3,569.9 apiece at 11.05 am on Tuesday, March 11.

The brokerage said its IT sector pick is Persistent Systems and it also likes TCS..

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