We expect Mphasis to do well in terms of growth and will sustain margins as well, said Manik Taneja, IT services research analyst at JM Financial Institutional Securities, on Friday.

Speaking in an interview to CNBC-TV18, he said, “Our preferred pick among the tier-II tech have been companies like Mphasis and Coforge.”

“Mphasis stepped up on sales and marketing investment to drive growth between strategic accounts and this is already resulting in certain vendor consolation wins for the company. Therefore, Mphasis do very well in terms of growth and from margin standpoint they are fairly stable through the year and that sustenance should continue for them,” said Taneja.

Talking about Mindtree, Taneja said, “Our target price is close to Rs 1,650-1,700 levels. They have done good job in terms of margin improvement and a bulk of that margin expansion is a function of rationalization taken in terms of cost efficiencies, savings around travel and facilities which are approved across the entire industry along with offshore shift of business.”

“However, from growth standpoint Mindtree still continue to lag peers and is significantly dependent on the top clients to drive growth and that is where our relative preference for other names in the sector,” he said.

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(Edited by : Abhishek Jha)