IT stocks were the top BSE Sensex contributors in today's upbeat trade. Out of 30 Sensex stocks, the top three gainers were Tech Mahindra, HCL Technologies and Infosys.
IT stocks were the top BSE Sensex contributors in today’s upbeat trade. Out of 30 Sensex stocks, the top three gainers were Tech Mahindra, HCL Technologies and Infosys. Also, Tata Consultancy Services (TCS) shares hit a fresh 52-week high of Rs Rs 3,327 apiece, rising nearly 2 per cent from the previous close. Similarly, shares of Tata Elxsi also scaled a fresh 52-week of Rs 2,826 apiece. So far, most of the IT companies have reported better-than-expected October-December quarter earnings and revised revenue guidance for FY21. According to an analyst, enterprise technology spends are likely to remain resilient over the medium term. “We expect Indian IT names to report strong double-digit revenue growth in FY22/FY23 driven by continued deal win momentum,” Suyog Kulkarni, Senior Research Analyst, Reliance Securities told Financial Express Online.
Kulkarni also said that Nifty IT is likely to enjoy premium valuation vs broader market-driven by mid-term growth visibility, elevated margins and consistent cash return policy. All the ten Nifty IT constituents were trading in the positive territory with the Nifty IT index at 26,758.10 level. Along with TCS, Mindtree shares have also made a new 52-week high today, post strong third-quarter earnings.
AR Ramachandran, Co-founder & Trainer, Tips2Trade, told Financial Express Online that with strong Q3FY21 results and buoyant market sentiment, it is no surprise that TCS & and Tata Elxsi are making newer highs. “However, markets are extremely exuberant and hence every uptrend now should be used to book profits and wait for at least a 10-15% correction for fresh buy positions,” he added
Analysts at Axis Securities see 16 per cent upside in the stock. Mindtree management also guided for investment, timely strategy refresh led by the consolidation of service lines, attention towards multi-year engagements and focus on scaling top accounts can aid sales traction. “We believe Mindtree has a resilient business structure from a long term perspective and strong execution strategy,” they added.
In comparison, S&P BSE Sensex was trading 254 points or 0.51 per cent higher at 49,652, while the broader Nifty 50 index gained 80 points or 0.55 per cent to rule at 14,601.