TCS, Infosys, HCL Technologies, Wipro share prices hit their respective 52-week highs on Wednesday, taking the Nifty IT index to a fresh high of 33,840.45 levels
TCS, Infosys, HCL Technologies, Wipro share prices hit their respective 52-week highs on Wednesday, taking the Nifty IT index to a fresh high of 33,840.45 levels. Tata Consultancy Services stock hit a new high of Rs 3,594.60, gaining over half a per cent. In the previous session, TCS became the second most valuable domestic firm in terms of market valuation after Reliance Industries Ltd (RIL) with mcap of over Rs 13 lakh crore. Earlier this year, the IT major had breached the Rs 12 lakh crore market valuation mark. Infosys surged to Rs 1,755, rising 0.7 per cent. “The IT sector has been consistently performing well with continuous positive momentum in the sector. The main reasons behind the positive momentum and healthy revenue growth for these are Strong order bookings, broad-based revenue growth and stable margins,” Ashis Biswas, Head of Technical Research, CapitalVia Global Research, said.
HCL Technologies’ share price surged to Rs 1,158.90, gaining 1.5 per cent, and Wipro added 0.6 per cent to touch a fresh 52-week high of Rs 639.05 apiece. Analysts say correction in midcap and smallcap stocks, and faster digitisation with stable revenue and profit growth have led to an excellent rally in the large-cap IT stocks like TCS, Infosys and HCL Technologies. “Technically, investors should start booking profits in these stocks as they are quite overbought. Rs 3350, Rs 1600 and Rs 1040 would be reasonable levels to re-enter TCS, Infosys and HCL Technologies, respectively, in the coming weeks,” Pavitraa Shetty, Co-founder & Trainer, Tips2Trades, told Financial Express Online.
Ashis Biswas said that the second reason for the healthy revenue growth for these companies is the minimal impact of the second wave of COVID-19 on the sector. Further, this being a seasonally strong quarter, coupled with acceleration in digital technologies and improved deal pipeline are further expected to have driven the revenue for these companies. “We can strongly believe in the further growth of the IT sector and hence these companies as these are major players in the sectors. These companies have managed to make their order book strong as due to Covid a lot of companies’ revenues declined which forced them to transfer jobs to developing countries where the charges are low. This has benefited these companies and hence helped them expand their customer base and increase the revenue,” Biswas added.
Biswas also believes this pattern to continue in the coming times as it has benefited the companies around the globe to get their work done efficiently at a lower price. “TCS, Infosys and HCL being the major players will have the major chunk of the business and hence we see growth in the companies to continue further,” he said.
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