The Baseline    
10 Oct 2021
Stocks outperforming the index ahead of results, with broker upgrades

As we enter the September quarter results season, some stocks are beginning to pop with investors, indicating anticipation of a strong Q2. Right now, both analysts and investors are gravitating to one set of companies in particular - those in the technology sector.

Five of six stocks in this screener (live screener, so stocks will keep updating) filters for three criteria - 1) upcoming results 2) broker upgrade in the past three months and 3) weekly performance beating the Nifty500 - are currently technology stocks. Q2 is a seasonally strong sector for tech, and analysts are expecting a good performance for much of Indian IT. 

1) Persistent Systems: This tech company is the biggest gainer in the list this past week, rising by over 10% in share price. Persistent has been in the news regarding recent acquisitions and Axis Direct is bullish on the stock, despite its PE of nearly 60. 

2) Mphasis: The Blackstone-controlled tech company has also been gaining in the past week, with recent buzz around the company's acquisition of US firm Blink, that gives it access to large US tech businesses that are Blink's customers including Facebook and Google. The acquisition has enthused analysts including Prabhudas Liladhar to assign a BUY rating on the stock. It's PE TTM is 47+.

3) Mindtree: Mindtree has ridden the Covid wave in the past three quarters, with its share price rising over 200% in the past year. Brokerages have been bullish on Mindtree, and Indian software's second tier is expected to continue growing faster than the Tier 1 companies of TCS, Infosys and Wipro. 

4) Zensar Technologies: Zensar Technologies is a relatively under the radar Indian IT company which has recently been in the upswing since its new CEO Ajay Bhutoria took the reins. The company saw significant momentum in deal wins in the past quarter, as it booked orders worth over $96 million.

5) Asian Paints: The only non-tech company in this screener is the market leader in the paints industry. Besides its index outperformance and expectations of a strong Q2 ahead of India's festival season, this company has also seen mutual funds raise their holdings in the stock in the past month. 

See the full screener. This screener will continue to update through the results season. 

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