Information Technology (IT) stocks continued their rally with the sector gauge Nifty IT index rising more than a percent intraday Thursday. The stocks of IT majors Tech Mahindra, Infosys and Birlasoft hit 52-week highs and were among the top Sensex movers.
Meanwhile, Wipro, Mindtree and Tata Consultancy Services (TCS) were the top contributors to the rally of the Nifty IT index.
IT stocks have remained the top performers with them limiting losses even on days when the market witnessed massive correction. Analysts have remained positive on tech stocks and suggested that their upcycle will continue in the medium term.
Sandip Agarwal, Research Analyst - Institutional Equities, Edelweiss Securities last week told CNBC-TV18 that three more years are left of the current IT upcycle. He added that it will be hard for any tech firm to disappoint in the medium term.
Birlasoft Ltd shares rose 4.8 percent during the day to hit a 52-week high of Rs 526.40 per share on the Bombay Stock Exchange. The Infosys stock witnessed a jump of almost 2 percent to trade at Rs 1,860 apiece. Tech Mahindra too rose nearly 2 percent to its 52-week high of Rs 1682 per share.
In 2021 (year-to-date), Infosys shares have given investors a return of more than 46 percent, Tech Mahindra has returned almost 72 percent, whereas Birlasoft has given a whipping 110 percent return.
Earlier in the day, Aditya Narain, Managing Director, Head of Research, Edelweiss Securities, said the technology space is something that one must capture and must have a certain balance across one's portfolios.
According to Mayuresh Joshi of William O'Neil, ever since Accenture upped its guidance, all outsourcers, including HCL Tech, Infosys and the entire IT Indian landscape has come back into focus.
“The whole positives that are surrounding this space definitely act as tailwind. Strong order book, expectations in terms of solid revenue growth, both in the dollar and constant currency terms, because there has been a huge cost optimisation,” he said on Wednesday.
He expects the sector to keep rising at least for the next two quarters as he believes digitisation and automation are the key buzzwords right now.
“Stocks like Infosys, Tech Mahindra, Wipro – all these large names and selective midcap names like Tata Elxsi, MindTree where I think there is a lot more happening in terms of structural drivers, in terms of revenue growth, I think the sector looks poised for reasonable earnings momentum,” he said.
(Edited by : Ajay Vaishnav)
First Published: IST