Information technology stocks stole the limelight today after a positive read-through from technology giant Accenture's quarterly earnings.
Nifty IT gained the most among sectoral indices on the NSE and was up over two percent.
The sectoral index rose with shares of Infosys, Larsen & Toubro Infotech, Tata Consultancy Services (TCS), Mphasis leading the upmove today.
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Wipro, Infosys and HCL Technologies were the best performers on the Nifty50, rising 2-3 percent. TCS shares were up 1.5 percent.
US-based IT major Accenture reported robust revenue growth for the quarter ending August 2021, crossing the milestone of $50 billion in annual revenue for FY21.
The company reported $13.4 billion in revenue, up 24 percent on-year, for its fourth quarter ended August 2021. In terms of profits, the company has reported a 10 percent on-year rise in net profit at $1.44 billion in the August quarter from $1.3 billion for the comparable quarter last year.
Motilal Oswal Financial Services believes that the demand environment continues to remain strong and is sustainable. Solid and conservative guidance for FY22 and strong headcount addition provides visibility to India’s IT growth momentum.
The brokerage firm maintains its positive stance on the IT sector as it sees sustained growth with stable margins, and its preferred picks within tier I IT stocks are Infosys and HCL Technologies.
Accenture’s commentary reflects customers’ intent to embrace digital transformation to generate business value faster, said Nirmal Bang Institutional Equities.
The 20 percent growth in order inflow in FY21 at $59 billion and commentary that pipeline continues to be strong, are indicators that the low teen growth expectation the street has built-in for the Indian IT players for FY23 is realistic. It could help sustain the high PE multiples that they are currently trading at but may not help much in expanding them further, Nimal Bang Institutional Equities said.
Meanwhile, Julius Baer & Co like private sector banks, IT sector and insurance sector in India, Mark Matthews told CNBC-TV18.