IT stocks have seen a strong boom this year due to the huge potential for Indian IT companies. The IT index of Nifty has been the outperformer of this year. Selected largecap and midcap companies in this sector have performed strongly.
Morgan Stanley in his recent report on IT Midcap has said that Mindtree And Mphasis Like mid-cap IT companies, earnings will continue to grow strongly and their valuation gap will be seen to narrow as compared to the largecaps of this sector.
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Morgan Stanley expects Mindtree to see strong earnings growth in the coming quarters. The company will further benefit from the current services as well as the recovery in the travel vertical. In the coming quarters, companies can be seen getting many big deals. In view of this, the outlook of the company for the financial year 2023 also looks very good.
Morgan Stanley believes that the company’s margins and EPS may also see an increase in FY 2023. Morgan Stanley has given a target of Rs 3,450 while giving an overweight rating to Mindtree.
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Morgan Stanley is overweight on Mindtree as well as Mphasis. It has given a target of Rs 3,150 for Mphasis.
It is worth noting that the share price of both Mindtree and Mphasis has seen a strong increase this year. Mindtree has seen a growth of 93 per cent so far this year while Mphasis shares have rallied 85 per cent in the same period. Morgan Stanley still expects more upside in these stocks, even after the gains made so far.
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