A Pune tech firm is the only one on JPMorgan's 'overweight' list in the engineering, research and development space

Shares of Persistent Systems Ltd jumped as much as 6.6 percent on Thursday after brokerage house JP Morgan upgraded the call on shares of the company to 'overweight' from 'neutral'.

Persistent Systems is JPMorgan's only "overweight" within the Engineering, Research & Development (ER&D) space.

JPMorgan gave a revised target price of Rs 4,100 per share. The earlier target price was Rs 3,900 apiece. The stock of Persistent Systems was trading 5.9 percent up at Rs 3,491.8 on BSE at 10:50 am.

The brokerage house has said that Persistent Systems had a relatively defensive portfolio with exposures to software tech, BFSI and medical clients and has the highest exposure to US-based clients who are relatively better placed on tech spending as opposed to Europe clients.

The company derives the highest share of its revenues in dollars, which has been strengthening against the Indian currency. "Expect Persistent Systems to clock highest earnings CAGR of 25 percent over FY22-25E," the brokerage house said in its report.

Another reason for the upgrade, according to JPMorgan, is that the company trades at a discount to midcap peers L&T Technology Services and Larsen & Toubro Infotech and is on par with Mindtree despite higher growth expectations. At 26x 1 year forward price-to-earnings ratio, the brokerage house sees an attractive entry point.

The shares of Persistent had fallen over 30 percent this year, before today's jump.