CLSA Predicts 79% Surge in Persistent Systems Stock Amid AI-Driven Tech Boom

CLSA is optimistic about the Indian IT sector, citing artificial intelligence (AI) as a major growth driver. The brokerage firm has added Persistent Systems to its “high-conviction outperform” list, setting a price target of ₹9,267, indicating a potential 79% upside. TCS is also among CLSA’s top picks, with an “outperform” rating and a price target of ₹4,546, suggesting a 27% upside. CLSA believes AI will drive a new technology cycle, significantly benefiting Indian IT firms, particularly in areas like data cloud, cybersecurity, SaaS, and automation.

Among analysts covering Persistent Systems, 18 recommend “buy,” nine suggest “hold,” and 13 advise “sell.” Meanwhile, TCS has received 33 “buy,” 10 “hold,” and five “sell” ratings. As of 11:05 AM on March 11, Persistent Systems was trading 0.88% higher at ₹5,212.5, while TCS shares were down 0.55%, trading at ₹3,569.9. CLSA maintains that generative AI will play a transformative role in the IT sector, fueling long-term growth.

CLSA Predicts 79% Surge in Persistent Systems Stock Amid AI-Driven Tech Boom

CLSA, a prominent brokerage firm, has recently expressed strong optimism regarding the Indian IT sector, forecasting significant growth driven by a new technology cycle centered on artificial intelligence (AI). In a detailed analysis, the firm emphasized that advancements in AI, particularly generative AI, are poised to revolutionize the industry, creating substantial opportunities for Indian IT services companies. This bullish outlook highlights the sector’s potential to capitalize on evolving global tech demands, positioning India as a key player in the next wave of digital transformation.

Persistent Systems Ltd. has emerged as CLSA’s top pick in this evolving landscape. The firm has added the company to its “high-conviction outperform” list, setting a price target of ₹9,267 per share. This target implies a striking 79% upside from the stock’s closing price on Monday, March 11, reflecting CLSA’s confidence in Persistent Systems’ ability to leverage AI-driven innovations. The brokerage highlighted the company’s strategic focus on high-growth domains such as cloud computing, cybersecurity, and enterprise software solutions as critical drivers of its optimism. Persistent Systems’ expertise in integrating AI into scalable solutions for global clients is expected to position it at the forefront of the sector’s expansion.

Similarly, CLSA reaffirmed its “outperform” rating on Tata Consultancy Services (TCS), India’s largest IT services provider, with a price target of ₹4,546. This projection suggests a 27% potential upside, underscoring TCS’s robust capabilities in navigating the AI revolution. The firm noted TCS’s extensive client base, deep investments in AI research, and proven track record in delivering complex digital transformations as key strengths. CLSA believes TCS is well-positioned to harness generative AI technologies to enhance operational efficiency, drive innovation, and secure long-term client partnerships.

Generative AI, a subset of AI capable of creating content, automating workflows, and simulating human-like interactions, is identified as a transformative force. CLSA predicts this technology will unlock new revenue streams and productivity gains across industries, from healthcare to finance. Indian IT firms, with their expertise in software development and global delivery models, are expected to play a pivotal role in implementing these solutions for enterprises worldwide.

To assess the sector’s potential, CLSA employed a proprietary framework evaluating factors such as total addressable market size, revenue growth opportunities, productivity enhancements, practical use cases, and implementation timelines. This analysis identified data cloud solutions, cybersecurity, Software-as-a-Service (SaaS), and automation as high-growth areas. Companies excelling in these domains are likely to outperform peers, as businesses increasingly prioritize digital resilience, data security, and operational agility in a post-pandemic economy.

Analyst sentiment toward Persistent Systems remains mixed but leans positive. Of the 40 analysts covering the stock, 18 recommend a “buy,” nine advise “hold,” and 13 suggest “sell.” This divergence highlights varying perspectives on the company’s valuation and growth trajectory amid market volatility. In contrast, TCS enjoys stronger consensus, with 33 out of 48 analysts endorsing a “buy” rating, while 10 recommend “hold” and five suggest “sell.” This broader confidence reflects TCS’s market leadership, diversified portfolio, and consistent execution in challenging environments.

On March 11, Persistent Systems’ shares traded 0.88% higher at ₹5,212.5 by late morning, signaling cautious investor optimism. TCS, however, saw a slight dip of 0.55%, trading at ₹3,569.9, possibly reflecting profit-taking or short-term market fluctuations. Despite these intraday movements, CLSA’s long-term outlook remains optimistic, emphasizing that AI-driven demand will outweigh near-term headwinds like economic uncertainty or delayed client spending.

The report also highlights a broader industry shift, where IT firms transitioning from traditional outsourcing to AI-powered, value-added services are likely to thrive. Companies investing in upskilling employees, forging alliances with AI platforms, and developing industry-specific solutions are expected to gain market share. Conversely, slower adopters risk losing relevance as clients prioritize partners capable of delivering cutting-edge technological advancements.

In summary, CLSA’s analysis presents a compelling outlook for the Indian IT sector, anchored by AI’s disruptive potential. Persistent Systems and TCS are positioned as primary beneficiaries, each leveraging distinct strengths to drive growth. While market reactions may vary in the short term, the firm’s projections suggest a paradigm shift where innovation and adaptability will define success in the evolving tech landscape. Investors seeking long-term gains may find opportunities in these companies as they navigate the AI revolution and reshape global digital ecosystems.