Goldman Sachs sees stable pricing trends for IT sector; neutral on TCS, Infosys

Infosys | Rating: Neutral from Sell | Target: Rs 799

On the other hand Goldman Sachs has upgraded Infosys from a sell rating to neutral maintaining a target price of Rs 799 per share. The research firm believes that the stock is fairly valued at the current level. However, it feels that the stock is likely to face headwinds with discretionary IT spend, margin and utilisation pressure and uncertainty around strategy. On the flip side, Goldman Sachs sees some positive tickers for Infosys including growth in app business, increase in revenue per employee, utilisation and pricing growth.

Wipro| Rating: Sell from Neutral | Target: Rs 238

Goldman Sachs has downgraded Wipro from neutral to sell rating and has maintained a target price of Rs 238 per scrip. The research firm believes that recent outperformance of the company does not reflect any fundamental change in business model and expects EPS growing at compound annual growth rate (CAGR) of 3 percent over FY17-20. According to Goldman Sachs, Wipro may face headwinds inclusing underperformance in quarterly earnings, market share loss and continued uncertainty in healthcare verticals.

At 12:14 hrs Tata Consultancy Services was quoting at Rs 2,502.40, up Rs 3.85, or 0.15 percent while Infosys was quoting at Rs 912.50, up Rs 3.90, or 0.43 percent and Wipro was quoting at Rs 288.20, up Rs 2.45, or 0.86 percent.