TCS, Infosys share prices hit new 52-week highs; BSE IT index at record high, rallies 15% YTD

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Updated: Apr 09, 2021 11:04 AM

TCS and Infosys share prices hit fresh 52-week highs on Friday, ahead of January-March quarter earnings of IT companies that would start from next week.

Infosys, TCS, hcl techBSE IT index scaled a fresh record high of 28,161.97, rising nearly a per cent

TCS and Infosys share prices hit fresh 52-week highs on Friday, ahead of January-March quarter earnings of IT companies that would start from next week. BSE IT index scaled a fresh record high of 28,161.97, rising nearly a per cent. Meanwhile, L&T Technology Services, MindTree and Persistent Systems shares hit all-time highs on Friday. In the year so far, the BSE IT index has rallied 15% as compared to a 4.3 per cent rise in BSE Sensex. From the BSE IT index, Eclerx Services Ltd and Sonata Software shares too hit new 52-week highs on Friday. Research and brokerage firm Motilal Oswal Financial Services prefers Infosys and HCL Technologies, on the expectation of industry-leading growth. It also bets on L&T Technology Services and Cyient Ltd, given their attractive and industry-relevant portfolios.

Indian IT stocks are witnessing a dream run, lead by the leaders, the likes of Infosys and TCS, hitting record highs. “Overall, the COVID event has completely and dramatically changed the landscape of business forever,” said Aamar Deo Singh, Head Advisory at Angel Broking. IT sector appears to be a major beneficiary. Singh also added that mega-deals, huge savings on infrastructure and significant order flows have helped the IT companies tremendously. “Also, weakening rupee, recovery in the IT sector in the US and expectations of strong Q4FY21 results are fueling the current rally,” he said.

Amongst the IT pack, TCS and Infosys have hit 52-week highs largely because investors have high expectations that Q4FY21 earnings will be robust, said Ajit Mishra, VP-Research, Religare Broking Ltd. Mishra told Financial Express Online that uptrend is driven by high demand for digitalisation and cloud adoption due to adoption of work from home culture. “Also, large deals and healthy order pipeline would help companies to post strong revenue growth,” he added.

BSE IT index touched a 52-week low of 12,224.39, and from there it has risen a massive 130 per cent. Most of the IT stocks have been trading higher and outperforming the benchmark indices in the last few trading sessions. “Expectations of Q4FY21 results from most of the IT companies and a weakening rupee are boosting the sentiments of the investors and leading to the rally. Moreover, expectations of a buyback announcement from Infosys is another factor that is specifically driving the stock, said an analyst. “The restrictions being reimposed, increasing work from home, and recovery in the IT sector in the US are making investors shift their preference to the defensive sectors and adding fire to the fuel,” Likhita Chepa, Senior Research Analyst at CapitalVia Global Research told Financial Express Online.

(The stock recommendations in this story are expressed by the respective experts of research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

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