IT Sector Looks Stronger In Near Term; Raising Target Prices, Says Nirmal Bang
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Nirmal Bang Report
We raise revenue and earnings estimates and consequently target prices across our coverage universe as we see FY21-FY23 demand stronger than we had anticipated, with significant transfer of legacy assets (both employees with legacy skill sets and technology assets which are largely on-premise) to outsourcing vendors being the key driver.
We have seen a glimpse of that from the number and nature of large deals that have been signed by Tier-I players in the last few months.
We see the elevated valuation of individual stocks (which are at 10-12 year peaks) holding up in the context of the accelerated organic revenue and earnings growth that we anticipate in the FY21-FY23 timeframe relative to FY15-FY20.
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