Brokerage Views: Bernstein On IT Services, Nuvama On Godrej Consumer And More

Bernstein Research initiated coverage on auto and software engineering services companies Persistent Systems Ltd., KPIT Technologies Ltd., Coforge Ltd. and Tata Elxsi Ltd. Citi initiates coverage on Affle (India), while Nuvama shared its outlook on Godrej Consumer Products Ltd.

NDTV Profit tracks what the brokerages are putting out on stocks and sectors. Here are all the top calls from analysts that you need to know about on Tuesday.

Bernstein On Indian IT Services

Initiated coverage on auto and software engineering services companies.
Investment in engineering has become a necessity to develop new products and solutions.
Digitisation and scarcity of talent has increased outsourcing, which benefits specialists in the auto software segment.
Engineering services are growing faster than IT services.
Software has new technologies like cloud, internet of things and artificial intelligence. This has led to research and development intensity increasing.

Persistent Systems

Initiated an ‘outperform’ rating on the stock with target price of Rs 5,920 apiece, implying a potential upside of 24% from the previous close.
Specialised in software services,
Working with clients like Microsoft and Salesforce Inc.

KPIT Technologies

Initiated an 'outperform' rating on the stock with a target price of Rs 2,120 apiece, implying a potential upside of 25% from the previous close.
Serves large original equipment manufacturers and tiers like BMW, General Motors India Pvt and Cummins India Ltd.
Has become a dominant player since its initial public offer in April 2019.

Coforge

Initiated a 'market perform' rating on the stock with a target price of Rs 6,080 apiece, implying a potential upside of 3.6% from the previous close.
Traditional IT services company with focus on banking, financial services and insurance.
Expects large IT services companies to gain market share over time.
Recent acquisition of Cigniti Technologies Ltd. likely to see headwinds due to AI disruption.

Tata Elxsi Ltd.

Initiated an ‘underperform’ rating on the stock and a target price of Rs 6,030 apiece, implying a potential upside of 14.2% from the previous close.
Has delivered just 17% compound annual growth rate over the last five years.
This is the slowest growth among engineering peers.
Top five clients accounting for 44% of revenue is a key risk.
Stock is expensive at 50 times its price to earnings ratio with slowing growth momentum.

Also Read: Stocks To Watch: Godrej Consumer, Godrej Industries, Bajaj Finserv, Torrent Power, Container Corp, JSW Steel

Citi On Affle (India)

Initiated coverage with a 'buy' rating on the stock and a target price of Rs 1,600 apiece, implying a potential upside of 19.5% from the previous close.
It is an adtech platform and will benefit from new online customer acquisition spending.
It has partnerships across supply-side with OEMs.
Has a conversion-based business model where customers pay for the performance.
Has its focus in acquisitions following its recent acquisition of YouAppi.
Expects 20% top-line CAGR over FY24–27 and 400-basis-point expansion in EBIT margin.
Values the company at 48 times its March 2026 estimates of (P/E) ratio.
Pecking order: Zomato Ltd., Info Edge (India), Delhivery Ltd., Affle (India) and CarTrade Tech Ltd.

Also Read: Trade Setup For July 9: Investors Await Q1 Earnings As Nifty Faces Key Resistance Levels

Nuvama On Godrej Consumer Products

Maintains a 'buy' rating on the stock and a target price of Rs 1,510 apiece, implying a potential upside of 6% from the previous close.
India volume growth (organic) is likely to be 8% YoY (5% value growth).
Negative forex impact drags down top-line growth.
Expects consolidated sales and Ebitda to grow at 2.1% and 12% YoY.
Domestic volumes (organic) are likely to inch up 8% YoY.
Expects overall gross/Ebitda margin to expand 196bps/193bps YoY.
International business shall dip 1% YoY in rupee terms.
Indonesia, mid-single digit volume growth is likely on a high base.
Indonesia is likely to post strong double-digit Ebitda growth.
Expects a weak Godrej Africa, US, and Middle East business (likely double-digit volume fall),
In profit terms, expects strong double-digit growth from GUAM business.
Expects a positive trajectory in Africa to resume in volume terms for the second quarter in FY25.