Global brokerage firm Jefferies expects Indian IT companies to benefit from the recent 1-3% depreciation of the Indian Rupee against the US Dollar, Euro, and British Pound. A weaker rupee boosts revenue potential for IT firms with greater exposure to these currencies and a strong offshore workforce.
| Company | Value | Change | %Change |
|---|
Among large-cap IT stocks, Jefferies remains constructive on Infosys, LTIMindtree, and TCS, while Coforge, Sagility, and Mphasis are preferred picks in the mid-cap space. LTIM, Wipro, Sagility, and Coforge are best positioned, given their substantial USD/EUR/GBP revenue exposure and a higher proportion of offshore employees.
Jefferies has revised earnings estimates for IT firms upward by 2-5% to account for recent currency movements. However, the brokerage has lowered target price-to-earnings (PE) multiples by up to 15%, citing rising US bond yields and the recent PE derating in the Nifty index. Despite these valuation adjustments, Jefferies remains optimistic about the IT sector.
Catch live market updates with CNBC-TV18.com’s blog
