Stock Market Recommendations

According to Motilal Oswal Financial Services Ltd, the top stock picks for the week starting January 27, 2025, are Coforge and Persistent Systems. Let’s take a closer look:

Coforge: A Closer Look

COFORGE experienced an 8.4% QoQ CC growth in revenue, propelled by its ServiceNow & Microsoft partnerships, the "Quasa" AI platform, and the increasing demand for hyperscale & AI services. The company is rapidly approaching the USD2b revenue mark, with its deal win engine remaining best-in-class, securing USD500m+ deal wins for the second consecutive quarter. The 12-month executable order book saw a 40% YoY growth, with strong performance across all verticals, geographies, and service lines. The robust executable order book and a rebound in BFS client spending are positive indicators for COFORGE's organic business. Cigniti could emerge as a valuable long-term asset, with 4QFY25 YoY growth projections of 52% in revenue and 48.5% in PAT.

Persistent Systems: Breaking Down the Numbers

Persistent Systems reported a 3QFY25 revenue of $360.2m, with EBIT increasing by ~12% and PAT rising by ~15%. This growth was driven by improved utilization, cost optimization, offshoring, and better pricing. PSYS aims to achieve USD2b in revenue by FY27 and USD5b by FY31, focusing on its top 100 clients, expanding alternative service lines like Private Equity, and developing 12-15 sub-vertical growth engines. The company projects a 19% revenue CAGR over FY24-27E, with margin expansion supporting a 21%+ EPS growth. This positions PSYS as a unique diversified product engineering & IT services player, justifying a premium valuation multiple.

Disclaimer: The opinions, analyses, and recommendations expressed herein are those of the brokerage and do not reflect the views of The Times of India. Always consult with a qualified investment advisor or financial planner before making any investment decisions.