IT stocks traded on a mixed note on Wednesday as investors awaited the quarterly results of TCS, Infosys and Wipro due later in the day. TCS and Wipro were in the red in morning deals.
TCS shares ended 1.5 percent lower at Rs 3,857.3, and the Wipro stock declined 0.4 percent to settle at Rs 691.4. Infosys held on to green territory, finishing the day with a gain of 1.2 percent at Rs 1,877.6.
The Nifty IT index closed flat.
Among Nifty IT gainers were HCL Tech, Coforge, Mindtree and Mphasis, rising between 0.4 percent and 1.3 percent. On the other hand, Tech Mahindra, L&T Tech, L&T Infotech were among the laggards, declining between 0.2 percent and 0.8 percent.
HCL Technologies will report its Q3 earnings on Thursday, and Mindtree on Friday.
Analysts polled by CNBC-TV18 expect TCS to post a profit of Rs 9,857 crore for the quarter ended December, as against Rs 9,624 crore in the previous three months.
They expect Infosys to post a 5.2 percent sequential rise in net profit to Rs 5,701 crore.
CLSA remains positive on the IT sector, with a bias for large-cap companies. Deal activity in the sector continues to be robust with the October-December period being the second-best quarter in terms of large deal awards, the brokerage said.
It believes that an incremental surprise in 2022 could be from margin expansion with visible leverage from a broadening employee pyramid even as supply-side pressures ease.
IT stocks have given phenomenal returns during the pandemic.
Market expert Deven Choksey is bullish on frontline IT companies, which he believes may surprise on the guidance and margin fronts in the coming year.
"Frontline IT companies are reportedly showing a good amount of growth, given the new orders and better realisations because of higher price commanded by them... Though the midcap IT companies are registering higher growth compared to frontline IT companies, but on a smaller base, and they are also commanding higher valuations," Choksey of KRChoksey told CNBC-TV18.
Here's how the key indices have fared in comparison to the headline Nifty gauge:
|S&P BSE Teck||36.6|
(Edited by : Akanksha Upadhyay)
First Published: IST