ICICI Securities keeps Hold on Tech Mahindra and Persistent Systems with new targets

what happened

ICICI Securities has kept Hold ratings on Tech Mahindra and Persistent Systems, according to a research note reported by Moneycontrol. For Tech Mahindra, the brokerage pointed to growth above 7% year on year against 2-3% for larger peers, a fourth straight quarter of USD 1bn-plus deal wins, and revenue per employee up 8% on a trailing basis. Its target is INR 1,590, based on an EPS estimate of INR 89 for Q3FY28-Q2FY29E and an unchanged 18x multiple.

For Persistent Systems, revenue rose 7.8% quarter on quarter and 20.8% year on year in constant currency, helped by a large Hitech deal ramp-up. Europe fell 10% sequentially in dollar terms, EBIT margin stood at 15%, and deal TCV matched the USD 600mn quarterly run-rate but was weaker year on year. The target is INR 5,670, set at 32x an EPS of INR 178.

why it matters

For IT services stocks, the notes highlight a growth gap between large caps and peers, with margins and deal timing central to valuation. According to the report, Tech Mahindra trades at 19.5x FY28E EPS, a premium of about 40% to TCS and Infosys. Investors following the sector will watch whether deal flow and margin trends hold up.

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