IT Stocks Outlook
Seen consolidating next week; TCS earnings in focus
This story was originally published at 20:19 IST on 4 October 2024
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MUMBAI - Shares of information technology companies may continue to consolidate next week, even as most constituents in the space are expected to report an improvement in earnings for the Jul-Sep quarter, according to analysts. Most IT companies' revenue is expected to grow sequentially due to a steady demand environment and large deal ramp-ups. However, macroeconomic uncertainties continue to restrict meaningful pick-up in the growth momentum, as per brokerage reports.
IT stocks have been on a bullish run since June and started witnessing selling for profit before the interest rate cut announcement by the US Federal Reserve. The Nifty IT index has gained 32% over the past four months.
This week, the Nifty IT index closed 1% lower at 41912.50. Of the 10 constituents of the index, seven ended lower on a week-on-week basis and the remaining gained. While Mphasis and Persisten Systems were among the top losers, Coforge was the top gainer. Compared to the Nifty IT, the benchmark Nifty 50 and the Sensex declined 4.5%, respectively.
Tata Consultancy Services will be the first among IT companies to announce its Jul-Sep earnings on Thursday. The company is expected to report low-single digit growth quarter on quarter in key earnings metrics.
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Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
|---|---|---|---|---|
| HCL Technologies | 1776.60 | (-)1.80 | 1824.60 | 1743.30 |
| Infosys | 1918.15 | 0.60 | 1987.50 | 1851.30 |
| L&T Technology Services | 5071.60 | (-)5.30 | 5308.40 | 4936.80 |
| LTIMindtree | 6114.10 | (-)0.40 | 6324.20 | 5994.90 |
| Persistent Systems | 5141.30 | (-)5.40 | 5486.80 | 4905.80 |
| Tata Consultancy Services | 4252.25 | (-)1.30 | 4332.10 | 4184.20 |
| Tech Mahindra | 1616.45 | 0.50 | 1676.00 | 1561.20 |
| Wipro | 533.55 | (-)1.50 | 548.40 | 520.60 |
| Nifty IT | 41912.50 | (-)1.00 | 42937.10 | 41170.70 |
| Nifty 50 | 25014.60 | (-)4.50 | 25673.70 | 24637.20 |
| S&P BSE Sensex | 81688.45 | (-)4.50 | 84032.10 | 80360.80 |
End
Reported by Darshan Nakhwa
Edited by Akul Nishant Akhoury
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