Nifty IT zooms over 3%; Persistent Systems, Coforge hit all-time highs; what's driving the rally?
Nifty IT in trade on October 23 zoomed over 3 per cent, with Persistent Systems and Coforge leading the pack after phenomenal Q2 earnings.
Amid muted global cues, Nifty IT index emerged as the top sectoral performer, buzzing over 3 per cent at the last count in Wednesday's session. Meanwhile, Nifty after regaining 24,600 levels in early trade was up 0.46 per cent or 111.5 points at 24,583.6.
All of the 10 stocks constituting the Nifty IT index traded in the green, with the most gains to the tune of 10-11 per cent seen on Persistent Systems and Coforge.
In fact, shares of the midcap IT major Persistent Systems marked their fresh all-time high of Rs 5,766.3 after posting better-than-expected Q2 numbers. Commenting on the Q2 performance, the company's Chief Executive Officer and Executive Director-Sandeep Kalra said, “We are proud to announce the 18th sequential quarter of revenue growth, delivering $345.5M
revenue, an 18.4% increase year-over-year. In the same period, our PAT grew by 23.4% in rupee terms.
Similarly, Coforge also logged better-than-expected Q2 with consolidated PAT climbing 52 per cent quarter-on-quarter to Rs 202.2 crore.
Other stocks, including Mphasis, LTIMindtree, Tech Mahindra, TCS and HCL Tech also saw traction and were up between 2-5 per cent at the time of writing the copy.
Atul Parakh, CEO of Bigul attributes today's upward movement in Nifty IT to increasing institutional confidence in the sector, particularly marked by FIIs raising stakes in 8 out of 10 top IT companies during Q2.
Despite mixed quarterly results, FIIs have significantly increased their holdings - Infosys (+54 bps to 33.28%), TCS (+31 bps to 12.66%), Tech Mahindra (+40 bps to 23.67%), and HCL Tech (+22 bps to 18.67%). This institutional buying appears strategic, positioning for anticipated US interest rate cuts, he added.
Revisiting IT companies' Q2 show
Q2 performance shows HCL Tech and Wipro beating margin expectations, while TCS missed estimates, noted Parakh.
Deal momentum moderated for most Tier-1 companies except Wipro, which showed strong large deal wins.
The contrasting sentiment between institutional investors (including mutual funds increasing stakes) and retail investors (who reduced positions across all top 10 companies) underscores the institutional bet on the sector's long-term prospects, Parakh underlined.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding | Starting at ages 25, 30 & 35, how to aim for Rs 2.5 crore early retirement corpus?
Latest FD Rates for Senior Citizens: SBI, PNB, Canara Bank, other lenders pay these returns in 5 years now
02:06 PM IST