India IT Services Update - Select Midcap Names To Maintain Growth Leadership: Reliance Securities
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Reliance Securities Report
We released our initiation report on Mid-cap IT names in July 2020 amid uncertainty over the sectoral outlook led by Covid-led disruptions.
Pandemic has accelerated enterprise IT transformation cycle with large enterprises stepping up focus on cloud migration, customer experience, data analytics and cyber security.
Indian IT names witnessed strong deal wins and margin recovery in FY21 driven by increased offshoring and higher utilisation.
Our interpretation of the current scenario, post series of interactions with the companies, sectoral experts and channel check suggests strong sustainable recovery and better earnings visibility.
We increase our earnings estimates of the mid-cap companies under our coverage universe by 14.8-45.6% and 10.748.8% for FY22E and FY23E, respectively.
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