IT stocks at up to 30% discount! TCS, Infosys, Wipro and others - Should you buy now? Anil Singhvi explains

IT Stocks: The IT sector witnessed a broad decline on Wednesday, with the Nifty IT index falling 1.7 per cent to 32,511.15, around 20.5 per cent below its 52-week high of 40,905.40.

Similarly, the BSE Information Technology index slipped 1.46 per cent to 31,513.67, over 14,200 points below its all-time high of 45,791.73, showing a decline of roughly 31 per cent from the peak. Stocks such as Wipro, OFSS, Coforge, and TCS are down more than 30 per cent from their peaks.

Infosys-Anthropic Deal Boosts Sentiment

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Market expert Anil Singhvi said a recent deal between Infosys and AI firm Anthropic has improved sentiment in IT stocks. He said the development has helped turn around the mood in the sector at a time when fear around artificial intelligence disruption was high.

“The Infosys-Anthropic deal sends a clear message that AI and IT services companies can complement each other and work together,” Singhvi said. “This reduces fear in the market and may support a recovery in IT stocks.”

Investment Strategy and Risk Advice

According to Singhvi, the Nifty IT index is trading about 20 per cent below its life high. He suggested that high-risk investors may consider investing gradually at current levels. “IT stocks have faced crises several times in the past. Each time the sector corrected sharply, but later revived. High-risk investors may start investing slowly,” he said.

IT stocks are down 16–33 per cent from their 52-week highs, with Wipro, OFSS, TCS, and Coforge among the most discounted.

However, Singhvi advised investors to change their approach towards IT stocks. He said the sector may no longer command very high valuation multiples as seen earlier. Instead, investors should focus on dividend yield and cash strength. He noted that IT companies typically have strong balance sheets, zero debt, and high cash reserves.

“Companies offering dividend yields in the 5–6 per cent range appear relatively attractive now,” he said. “At these levels, dividend yield provides some cushion and reduces part of the risk for investors.”

Major IT Stocks and Mutual Fund Advice

Among major IT stocks, Singhvi pointed out that Wipro is offering a dividend yield of over 5 per cent and is trading significantly below its life high. Infosys is also trading nearly 31 per cent below its peak valuation levels.

Singhvi further advised retail investors to consider investing through IT sector mutual funds instead of buying individual stocks. “It is better to invest through a basket approach. Mutual funds provide diversification and reduce stock-specific risk,” he said.

Market Outlook and Current Correction

Commenting on global markets, Singhvi said recent moves in US markets have not had a major impact on domestic sentiment. He added that volatility may continue due to AI-related developments, and investors should be prepared for sharp swings in IT stocks.

Overall, Singhvi said the current correction offers a potential opportunity for long-term investors. He suggested gradual accumulation and a diversified approach rather than aggressive buying. “Investors should focus on companies with strong cash flows and decent dividend yields,” he added.

The current correction in the IT sector comes after months of weak performance. Over the past month, the Nifty IT index has lost 16.82 per cent, while year-to-date it is down 14.83 per cent.

All major IT stocks traded in the red, including TCS, HCL Technologies, Infosys, Coforge, OFSS, Mphasis, Wipro, Persistent, Tech Mahindra, and LTI-Mindtree, with losses ranging from 1.35 to 2.53 per cent.