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The 2014 All-India Research Team: Information Technology, No. 3: Ashwin Mehta

< The 2014 All-India Research TeamAshwin MehtaNomuraFirst-place appearances: 0

Total appearances: 1

Analyst debut: 2014

Debuting at No. 3 on this lineup is Ashwin Mehta of Nomura. He is bullish on the prospects for India’s information technology companies, whose shares climbed 10.8 percent year to date through late October, though they trailed the nation’s broad market by 10.7 percentage points. Specifically, he maintains a positive outlook for demand dynamics, citing the continuation of strong growth in Europe and in the infrastructure management market as one factor. Another is the U.S. recovery, which should bolster demand from the current quarter onward, he says, while new technology trends — such as software as a service and SMAC (social, mobile, analytics and cloud) — will also benefit India’s IT companies as they shift their budgets toward these lines of business. Mehta recommends that investors buy Noida-headquartered HCL Technologies, a software developer and engineering services provider, because it is the “strongest in the infrastructure management space, so benefits the most out of deal rebids.” In addition, he foresees improving performance in its core software unit and an upside surprise to margin expectations. He also favors Cognizant Technology Solutions Corp. The India-focused U.S. multinational diversified services provider has the most exposure to the U.S. market, compared with domestic IT players in the space, the researcher notes, and is thus “best-placed” to benefit from a U.S. recovery. Moreover, adds Mehta, Cognizant is trading at nearly a 25 percent discount to Indian rival Tata Consultancy Services of Mumbai, is also strong in the financial services and health care markets and is poised to perform well thanks to regulatory-related spending in those areas.

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