JPMorgan predicts that Engineering Research & Development (ER&D) growth will rebound by 2025, but challenges in the telecom sector may limit the increase in value.

The firm has set a target price of Rs 6,400 for Tata Elxsi, which is a 7 percent decrease from its last closing price. Similarly, Tata Tech's target price of Rs 800 suggests a 16 percent decline from the previous session's close.

JPMorgan's latest report highlights a slowdown in ER&D services growth, resulting in a reduced valuation premium over IT. However, the firm expects this premium to expand next year as the automobile sector recovers from cyclical weaknesses.

Key picks in the ER&D space include KPIT Tech and Persistent Systems, both known for their strong growth prospects. L&T Technology Services and Cyient are also mentioned as key recovery plays.

JPMorgan maintains an overweight rating on KPIT Tech, with a target price of Rs 1,900, representing a 39 percent increase. Persistent Systems has a target price of Rs 6,100, indicating a modest 3 percent increase.