HSBC Reassesses India IT Landscape: Cuts Target for L&T Tech, Raises Targets for Hexaware and Coforge

HSBC has recalibrated its outlook on three major Indian IT players, signaling a mixed bag of sentiment across the sector.

 

L&T Technology Services (LTEH.NS) saw its target price cut to ₹4,790 from ₹5,065, reflecting concerns over muted growth and margin compression. The downgrade follows LTEH’s cautious FY25 guidance of 8–10% revenue growth and a 100-bps dip in EBIT margins, as the company invests in future capabilities. HSBC joins JPMorgan and Nuvama in trimming expectations, citing delayed deal ramp-ups and pressure in the mobility segment.

 

Hexaware Technologies (HEXW.NS), on the other hand, received a bullish nod with HSBC raising its target to ₹1,000 from ₹950. The brokerage sees 20%+ EPS growth over the next two years, driven by Hexaware’s balanced sales engine and strong client mining. Despite risks tied to U.S. government-linked entities and private equity exits, HSBC believes Hexaware offers a compelling growth-to-valuation ratio.

 

Coforge Ltd (COFO.NS) also earned a vote of confidence, with HSBC lifting its target to ₹1,780 from ₹1,607, citing robust organic growth and integration synergies from its Cigniti acquisition. Coforge’s Q2FY25 results impressed across verticals, and its 12-month executable order book and headcount growth support a strong revenue outlook. Brokerages like Nomura and Nuvama echoed HSBC’s optimism, with targets ranging up to ₹8,650.

 

These revisions reflect HSBC’s nuanced view of India’s tech landscape—cautious on legacy-heavy firms, but upbeat on agile, growth-focused players.

 

Source: Business Today, CNBC-TV18, NDTV Profit, Business Upturn, Moneycontrol