Shares of MindTree Ltd, Larsen & Toubro Infotech Ltd and Hexaware Technologies Ltd fell between 4.3 percent and 11.5 percent on Thursday.
“Mid-cap IT stocks are facing valuation correction as they were trading at very high valuations compared with their historical averages,” said Sudheer Guntupalli, a technology sector analyst, Ambit Capital.
The PE ratio of MindTree stands at 30.97, Hexaware at 30.31 and L&T Infotech at 29.29 compared with sector average of 21.26.
MindTree reported 30 percent YoY rise in June-quarter profit on Wednesday but markets were slightly cautious about the company’s outlook.
“The markets were building in strong margin expansion for Q2 but with management expecting “slight” improvement over Q1, it could be seen as a concern,” Guntupalli said.
MindTree’s stock posts biggest daily percent loss since November 9, 2016. About 5 million MindTree shares change hands compared with 30-day average of about 1.4 shares.
MidTree’s share traded at Rs 950, down by 10.59 percent, or Rs 112.55 on the BSE at 1.24 pm.
Hexaware Technologies shares traded at Rs 489, down by 2.46 percent or Rs 12.35 on the BSE.
L&T Infotech shares were at Rs 1743, down nearly 6 percent, or Rs 111 on the BSE.