Infosys, Mindtree, Mphasis shares hit new 52-week highs; Nifty IT index rallies 85% since March

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September 23, 2020 12:17 PM

IT stocks were in focus today as Infosys, Mindtree and Mphasis scaled a fresh 52-week high on Wednesday. Among Sensex gainers, Infosys and HCL Technologies were top index gainers, up over 2.5 per cent each.

Infosys, MindTree, MphasisIT stocks have outperformed many other sectors with the Nifty IT Index, generating returns of almost 100% since the March low of 10,991. Image: PTI

IT stocks were in focus today as Infosys, Mindtree and Mphasis scaled a fresh 52-week high on Wednesday. Among Sensex gainers, Infosys and HCL Technologies were top index gainers, up over 2.5 per cent each. In today’s trade, the Nifty IT index was the top sectoral gainer, rising 1.15 per cent. Out of 10 index constituents just TCS shares were trading in red, down 1.54 per cent. From the 52-week of March, the Nifty IT index has rallied around 85 per cent. “IT stocks have outperformed many other sectors with the Nifty IT Index, generating returns of almost 100% since the March low of 10,991. IT sector has been a stand-out sector with anticipation of better earnings reports in the forthcoming quarter, as compared to various other sectors,” Aamar Deo Singh, Head Advisory at Angel Broking, told Financial Express Online.

Infosys shares jumped 3 per cent to touch a new 52-week high of Rs 1,037.10 apiece, while Mindtree shares added 2.5 per cent. Similarly, Mphasis share price climbed 3.32 per cent to touch Rs 1,418 as its new high. Singh added saying that the IT sector appears to have become a favourite while at the same time, viewed as a defensive sector in the current COVID-19 scenario, given the rush towards digital. Amongst the frontline IT stocks, Infosys, HCL Tech, TCS, Mindtree and Mphasis, have all made investors very happy, all the way to the bank.

Analysts at Reliance Securities say that current re-rating in IT names is driven by increasing investors confidence on medium-term tech demand. Additionally, Indian IT names have been constantly refreshing their digital offerings through ecosystem partnerships or acquisitions. “We prefer Mphasis and L&T Infotech in IT pack given their recent strong deal wins, industry-leading revenue growth trajectory in FY22/23 and margin upside potential with cost-savings measures,” Suyog Kulkarni, Senior Analyst at Reliance Securities, told Financial Express Online.

In the noon deals, Infosys was up 2.31 per cent at Rs 1,030.45, Mindtree shares slipped into the red after hitting the fresh 52-week high. While Mphasis shares were trading at Rs 1,393.60 apiece, up 1.55 per cent. Research and brokerage firm Elara Capital has retained its constructive view on the sector, as acceleration in digital, cloud transformation, core modernization and cybersecurity, which coupled with resilient EBITM, driven by focus on operational efficiency, reduction in operating expenses (led by work from home), lower SG&A led by travel and marketing spend, ongoing pyramid rationalization, and automation efforts, provide cushion to FY22E earnings.

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