Bernstein recommends the approach, favouring IT stocks, due to an earnings upgrade cycle, a strong US macro environment, and recovery in discretionary/GenAI spending.
It prefers best-in-class largecaps (Infosys, TCS) and added growth-oriented midcaps (Persistent) and upgraded Coforge to its preferred list. Within the internet sector, it expects quick commerce to outpace other channels, with Zomato as the primary beneficiary.
Here is a brief of what Bernstein said about its top picks:
Infosys: Outperform| Target price: Rs 2,350
Infosys is positioned as a growth champion with a strong presence in cloud and digital services, supported by a robust pipeline of multi-billion dollar deals. While margins have room for improvement, the company is expected to benefit from increased spending in the US and within the banking sector. Projected growth rates for FY25-27 are 10%+ for revenue and 14% CAGR for EPS. Infosys is valued at a multiple of 27x, rolling over to LTM Dec’26 EPS.
TCS: Outperform | Target price: Rs 4,820
TCS is recognised as a margin champion, benefiting from healthy deal wins, best-in-class execution capabilities, and strong industry domain knowledge. The company has secured several large deals, contributing to projected growth rates of 9.5%+ for revenue and 13% CAGR for EPS over FY25-27E. TCS is valued at a multiple of 27.5x, rolling over to LTM Dec’26 EPS.
Persistent Systems: Outperform | Target price: Rs 7,280
Persistent Systems, a leader in software product engineering (45% of revenue) and technology offerings (cloud, AI), has demonstrated the fastest growth in IT services over the past three years (+30% CAGR), expanding margins to 14.5% in FY24 from 12% in FY21. With a strong management team, deep client base, and ability to secure cost take-out deals, the company is projected to grow at a 19% revenue CAGR and 27% EPS CAGR over FY25E-FY27E. The valuation has been revised to a 52.5x multiple (from 50x), rolling over to LTM Dec’26 EPS.Also read: MobiKwik Q2 Results: Firm posts net loss of Rs 3.5 crore; revenue jumps 43% YoY
Coforge: Outperform | Target price: Rs 11,280
Coforge possesses strong capabilities in the BFSI sector (50% of revenues), particularly within the insurance platform Duckcreek, and maintains a diversified client base across banks, insurance, and travel. Winning large deals and benefiting from growth in discretionary spending, Coforge is expected to achieve its revenue target of US$2 billion by FY27. Consequently, FY25/26 EPS estimates have been increased by 4.9%/11%, and the company is now valued at a 43x NTM P/E multiple (up from 32x), rolling over to LTM Dec’26 EPS.
Zomato: Outperform | Target price: Rs 335
The company holds a leadership position in both food delivery and quick commerce, driven by strong user acquisition and an expanding total addressable market (TAM) through initiatives like Dine Out and other growth options.
Bharti Airtel: Outperform | Target price: Rs 1,770
The company is positioned to benefit from the ongoing telecom repair cycle, driven by leading ARPU growth, improving cash flow, and growth opportunities in enterprise, fibre, and 5G rollout. However, EPS estimates have been updated downward by 4.6%/1.4% to reflect increased subscriber churn following tariff hikes. The India mobile services business is valued at 11.5x EV/EBITDA, rolling over to LTM Sep’26.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
