IT Stocks Outlook
Seen range-bound next week; Wipro, Infosys in focus
This story was originally published at 20:47 IST on 11 October 2024
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MUMBAI - Shares of information technology companies are expected to see movement within a range next week with several companies scheduled to report their Jul-Sept results, analysts said. While stocks are expected to react as per the financial performance reported by companies for the Sept quarter, the overall trend in the sector remains positive, they said.
"IT stocks have traded in a range after the US Federal Reserve cut interest rates," said Ruchit Jain, lead analyst at 5paisa. "This range-bound movement is likely to continue. For the (Nifty) IT index, 41600 (points) is the immediate support. If this support breaks, we might see some pull-back movement. Otherwise, price-wise, the downside seems to be limited in this space. Instead, there will be more of a time-wise consolidation."
This week, the Nifty IT sectoral index closed 1% higher at 42335.70 points. Of the 10 constituents of the index, eight gained week on week. The other two declined. While Persistent Systems Ltd. and LTIMindtree Ltd. were among the top gainers, Tata Consultancy Services Ltd. and Wipro Ltd. were the losers. Compared with the Nifty IT, the benchmark Nifty 50 and the BSE Sensex declined 0.2% and 0.4%, respectively.
On Thursday, Tata Consultancy Services reported lower-than-expected net profit for the September quarter despite the company's revenue growth being the highest in seven quarters. India's largest IT company reported a consolidated net profit of INR 119.1 billion, down 1% on quarter. Its revenue rose 2.6% on quarter to INR 642.6 billion. In a conference call with analysts, the company drew attention to the fact that global discretionary spending on IT has not improved, and that large transformative deals remain elusive. However, it expects lower interest rates in major economies to bode well for its business.
Next week, Wipro, HCL Technologies Ltd., and Mphasis Ltd. are also expected to report muted results for the September quarter. By comparison, Infosys, LTIMindtree, L&T Technology Services Ltd., and Mastek Ltd. are expected to post growth in earnings in the mid-to-high single digits.
TOP HEADLINES
* Earnings Outlook: Banking, fincl svcs to aid LTIMindtree Jul-Sep earnings
* Earnings Outlook: Wipro to report muted financial performance in Jul-Sept
* Analyst Concall:Tata Elxsi sees FY25 constant-currency sales up double digit
* Analyst Concall:See FY25 constant-currency sales up double digits - Tata Elxsi
* Analyst Concall:TCS sees boost from low interest rates but tones dn optimism
* Earnings Review: Tata Elxsi Jul-Sept net profit up 25% on qtr at INR 2.3 bln
* Earnings Review: TCS Jul-Sept consol PAT below view; operating margin falls
* Infosys, Germany's zooplus partner to enhance e-commerce capabilities
* Intellect Design launches eMACH.ai cloud platform for wholesale banking
* TalkCharge Tech moves HC against RBI order to stop payment service ops
* TCS cancels press conference scheduled after Jul-Sep earnings announcement
* TCS agreed to set up development centre in Vizag, Andhra govt says
* Sonata Software in pact with iNube to deliver digital insurance platform
* Earnings Outlook: TCS Jul-Sept growth seen muted; demand commentary in focus
* Equity Futures: Long bets added in TCS ahead of Jul-Sept earnings Thu
* Infosys, Microsoft expand tie-up for customer adoption of generative AI
* Happiest Minds launches new cybersecurity software
* Infosys expands four-year collaboration with US-based Old National Bank
* LTIMindtree launches new sustainability governance platform
* Wipro sets up arm in US to explore business, investment opportunities
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 | 1839.65 | 3.60 | 1883.20 | 1778.90 |
| Infosys | 1935.10 | 0.90 | 1967.60 | 1893.80 |
| L&T Technology Services | 5234.20 | 3.20 | 5301.90 | 5130.20 |
| LTIMindtree | 6410.95 | 4.90 | 6521.90 | 6284.60 |
| Persistent Systems | 5469.55 | 6.40 | 5675.20 | 5099.50 |
| Tata Consultancy Services | 4149.20 | (-)2.40 | 4297.40 | 4038.40 |
| Tech Mahindra | 1647.05 | 1.90 | 1680.40 | 1586.40 |
| Wipro | 528.30 | (-)1.00 | 541.70 | 513.60 |
| Nifty IT | 42335.70 | 1.00 | 43045.40 | 41379.40 |
| Nifty 50 | 24964.25 | (-)0.20 | 25079.60 | 24862.40 |
| S&P BSE Sensex | 81381.36 | (-)0.40 | 81819.50 | 81085.10 |
End
Reported by Darshan Nakhwa
Edited by Rajeev Pai
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