Latest news with #YogeshAggarwal
Economic Times
30-07-2025
- Business
- Economic Times
Not just TCS: Q1 results destroy midcap IT's last standing heroes
The darling status of India's midcap IT companies is evaporating faster than their stock prices, as investors who fled largecap IT bellwethers for supposedly safer harbors discover there's nowhere to hide in the sector's brutal downturn. While Tata Consultancy Services (TCS) has grabbed headlines with its 12,000-employee layoff plan and share prices being down one-third from peak, the once high-flying midcap IT stocks, previously shielded by their growth engine reputation, are also nosediving. ADVERTISEMENT The Q1 earnings season proved to be a tough one for mid-tier IT companies, with most reporting topline misses that sent investors scrambling for the exits. Having lost about 10% in a week, Persistent shares are in bear grip and down about 24% from peak. Coforge shares have also lost about 7% of its value in the last one week alone. "Q1 results triggered a sharp stock correction for most of the mid-tier IT companies," said HSBC India's Yogesh Aggarwal. "Every company print was interesting, with some idiosyncratic take-away." The grim reality: even companies posting what appeared to be decent numbers couldn't escape punishment. Mphasis "finally reported a sharp decline in its top logistic client" but somehow also delivered "strong growth and extremely strong deal wins". Also Read | Trent, TCS shares worst Nifty performers in 2025. Why 2 Tata stocks are down at least 25% this year Capital intensity is spiking across midcap IT as companies leverage their balance sheets to win fixed-price contracts. Coforge sits at the epicenter of this debate, with its free cash flow to revenue conversion averaging a mediocre 5% in recent quarters. ADVERTISEMENT "Most companies are leveraging their balance sheets to offer better terms for fixed-price contracts," Aggarwal warned, highlighting how desperate the competition has cash conversion crisis isn't isolated to Coforge. Persistent has seen similar increases in contract assets leading to weaker cash conversion, while even Mphasis reported the troubling trend in Q1. ADVERTISEMENT Also Read | Explained: Why TCS firing 12,000 employees may be a canary in the mine and what it means for investors Despite the carnage, some analysts are doubling down on beaten-down names. Jefferies upgraded Mphasis to BUY, arguing that "the key overhang in logistics vertical is behind" and raising their price target to Rs3,100 based on "an improving growth outlook." ADVERTISEMENT For Coforge, Jefferies maintained its BUY rating with a raised price target of Rs2,030, expecting the company to deliver 23% EPS CAGR over FY26-28 despite current Vinit Bolinjkar, Head of Research at Ventura Securities, struck a more cautious tone: "The Q1 FY26 earnings season proved challenging for midcap IT companies in India, despite initial investor preference for them over large-cap IT firms." ADVERTISEMENT The pain isn't just domestic. Weak discretionary spending as clients in the US and Europe delay IT projects amid trade and inflation uncertainties is crushing revenue conversion. "Deal pipelines remained robust, their conversion into revenue was slow, particularly impacting sectors like manufacturing, auto, and consumer packaged goods," Bolinjkar explained.A notable trend this quarter was the role of cross-currency tailwinds, especially due to appreciation in currencies like the Euro and British Pound, which boosted reported USD revenue growth. 'However, this partly masked the underlying weakness in volume-led business. On the profitability front, operating margins came under pressure across most firms, driven by wage hikes, higher visa-related costs, and relatively soft topline growth. Despite this, some companies demonstrated effective cost control measures through higher utilization rates, reduced subcontracting, and disciplined hiring,' said noted Anil Rego, Founder & Fund Manager of Right Horizons sector's elevated valuations are becoming impossible to justify without an earnings upgrade cycle. "The Nifty IT index, encompassing many midcap firms, had surged significantly, trading at a premium to its long-term average," Bolinjkar observed. "Without a clear earnings upgrade cycle, these elevated valuations appear difficult to justify."Even after recent corrections, some midcap IT stocks might still be considered stretched given the current growth outlook, a sobering assessment for investors who thought they'd found safety in the sector's supposed growth engines.'The outlook for midcap IT in the next few months appears mixed, with potential for continued pressure but also some pockets of resilience. Q1 FY26 results indicate a subdued start for the Indian IT sector, a trend likely to persist for midcap players. Most IT firms are maintaining cautious guidance, with largecaps like Infosys revising its FY26 revenue growth guidance to a modest 1-3%, reflecting a challenging demand environment. The lack of clear guidance from some large players further underscores this cautiousness for midcap players,' Bolinjkar most companies remain guarded in their short-term outlook but are optimistic about a recovery in H2FY26, as client budgets stabilize and deferred projects start ramping sector appears to be in a consolidation phase, with performance divergence expected to continue across players, Rego sums it up. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
30-07-2025
- Business
- Time of India
Not just TCS: Q1 results destroy midcap IT's last standing heroes
The darling status of India's midcap IT companies is evaporating faster than their stock prices, as investors who fled largecap IT bellwethers for supposedly safer harbors discover there's nowhere to hide in the sector's brutal downturn. While Tata Consultancy Services ( TCS ) has grabbed headlines with its 12,000-employee layoff plan and share prices being down one-third from peak, the once high-flying midcap IT stocks , previously shielded by their growth engine reputation, are also nosediving. The Q1 earnings season proved to be a tough one for mid-tier IT companies, with most reporting topline misses that sent investors scrambling for the exits. Having lost about 10% in a week, Persistent shares are in bear grip and down about 24% from peak. Coforge shares have also lost about 7% of its value in the last one week alone. Explore courses from Top Institutes in Please select course: Select a Course Category Cybersecurity Design Thinking healthcare Digital Marketing Project Management Technology Management Leadership Product Management Finance MBA MCA Data Science Healthcare CXO Data Science Operations Management Others others Data Analytics Skills you'll gain: Duration: 10 Months MIT xPRO CERT-MIT xPRO PGC in Cybersecurity Starts on undefined Get Details " Q1 results triggered a sharp stock correction for most of the mid-tier IT companies," said HSBC India's Yogesh Aggarwal. "Every company print was interesting, with some idiosyncratic take-away." The grim reality: even companies posting what appeared to be decent numbers couldn't escape punishment. Mphasis "finally reported a sharp decline in its top logistic client" but somehow also delivered "strong growth and extremely strong deal wins". Also Read | Trent, TCS shares worst Nifty performers in 2025. Why 2 Tata stocks are down at least 25% this year Live Events Cash flow crisis? Capital intensity is spiking across midcap IT as companies leverage their balance sheets to win fixed-price contracts. Coforge sits at the epicenter of this debate, with its free cash flow to revenue conversion averaging a mediocre 5% in recent quarters. "Most companies are leveraging their balance sheets to offer better terms for fixed-price contracts," Aggarwal warned, highlighting how desperate the competition has become. The cash conversion crisis isn't isolated to Coforge. Persistent has seen similar increases in contract assets leading to weaker cash conversion, while even Mphasis reported the troubling trend in Q1. Also Read | Explained: Why TCS firing 12,000 employees may be a canary in the mine and what it means for investors What analysts say Despite the carnage, some analysts are doubling down on beaten-down names. Jefferies upgraded Mphasis to BUY, arguing that "the key overhang in logistics vertical is behind" and raising their price target to Rs3,100 based on "an improving growth outlook." For Coforge, Jefferies maintained its BUY rating with a raised price target of Rs2,030, expecting the company to deliver 23% EPS CAGR over FY26-28 despite current struggles. But Vinit Bolinjkar, Head of Research at Ventura Securities, struck a more cautious tone: "The Q1 FY26 earnings season proved challenging for midcap IT companies in India, despite initial investor preference for them over large-cap IT firms." The pain isn't just domestic. Weak discretionary spending as clients in the US and Europe delay IT projects amid trade and inflation uncertainties is crushing revenue conversion. "Deal pipelines remained robust, their conversion into revenue was slow, particularly impacting sectors like manufacturing, auto, and consumer packaged goods," Bolinjkar explained. A notable trend this quarter was the role of cross-currency tailwinds, especially due to appreciation in currencies like the Euro and British Pound, which boosted reported USD revenue growth. 'However, this partly masked the underlying weakness in volume-led business. On the profitability front, operating margins came under pressure across most firms, driven by wage hikes, higher visa-related costs, and relatively soft topline growth. Despite this, some companies demonstrated effective cost control measures through higher utilization rates, reduced subcontracting, and disciplined hiring,' said noted Anil Rego, Founder & Fund Manager of Right Horizons PMS. Valuation check The sector's elevated valuations are becoming impossible to justify without an earnings upgrade cycle. "The Nifty IT index, encompassing many midcap firms, had surged significantly, trading at a premium to its long-term average," Bolinjkar observed. "Without a clear earnings upgrade cycle, these elevated valuations appear difficult to justify." Even after recent corrections, some midcap IT stocks might still be considered stretched given the current growth outlook, a sobering assessment for investors who thought they'd found safety in the sector's supposed growth engines. 'The outlook for midcap IT in the next few months appears mixed, with potential for continued pressure but also some pockets of resilience. Q1 FY26 results indicate a subdued start for the Indian IT sector, a trend likely to persist for midcap players. Most IT firms are maintaining cautious guidance, with largecaps like Infosys revising its FY26 revenue growth guidance to a modest 1-3%, reflecting a challenging demand environment. The lack of clear guidance from some large players further underscores this cautiousness for midcap players,' Bolinjkar said. However, most companies remain guarded in their short-term outlook but are optimistic about a recovery in H2FY26, as client budgets stabilize and deferred projects start ramping up. The sector appears to be in a consolidation phase, with performance divergence expected to continue across players, Rego sums it up. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Business Insider
20-07-2025
- Business
- Business Insider
HSBC Remains a Hold on Wipro Limited (WIPRO)
In a report released today, Yogesh Aggarwal from HSBC maintained a Hold rating on Wipro Limited, with a price target of INR260.00. The company's shares closed last Friday at INR266.95. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. According to TipRanks, Aggarwal is a 4-star analyst with an average return of 10.5% and an 81.25% success rate. Aggarwal covers the Technology sector, focusing on stocks such as LTIMindtree Limited, Cyient Limited, and KPIT Technologies Limited. In addition to HSBC, Wipro Limited also received a Hold from Morgan Stanley's Gaurav Rateria in a report issued on July 18. However, yesterday, TR | OpenAI – 4o reiterated a Buy rating on Wipro Limited (NSE: WIPRO). Based on Wipro Limited's latest earnings release for the quarter ending March 31, the company reported a quarterly revenue of INR225.04 billion and a net profit of INR35.7 billion. In comparison, last year the company earned a revenue of INR222.08 billion and had a net profit of INR28.35 billion Based on the recent corporate insider activity of 375 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of WIPRO in relation to earlier this year.
Business Insider
09-07-2025
- Automotive
- Business Insider
HSBC Sticks to Its Buy Rating for Hyundai Motor India Limited (HYUNDAI)
In a report released today, Yogesh Aggarwal from HSBC maintained a Buy rating on Hyundai Motor India Limited, with a price target of INR2,300.00. The company's shares closed today at INR2,055.10. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. According to TipRanks, Aggarwal is a 4-star analyst with an average return of 12.2% and an 82.76% success rate. Aggarwal covers the Technology sector, focusing on stocks such as Cyient Limited, Infosys Limited, and KPIT Technologies Limited. Hyundai Motor India Limited has an analyst consensus of Moderate Buy, with a price target consensus of INR2,000.00.
Business Insider
09-07-2025
- Business
- Business Insider
Ola Electric Mobility Limited (OLAELEC) Gets a Hold from HSBC
In a report released today, Yogesh Aggarwal from HSBC maintained a Hold rating on Ola Electric Mobility Limited, with a price target of INR45.00. The company's shares closed today at INR40.76. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. According to TipRanks, Aggarwal is a 4-star analyst with an average return of 12.2% and an 82.76% success rate. Aggarwal covers the Technology sector, focusing on stocks such as Cyient Limited, Infosys Limited, and KPIT Technologies Limited. Ola Electric Mobility Limited has an analyst consensus of Moderate Buy, with a price target consensus of INR67.50. The company has a one-year high of INR157.53 and a one-year low of INR40.42. Currently, Ola Electric Mobility Limited has an average volume of 4.46M.
