IT Stocks Outlook
Seen range-bound next week; Tech Mahindra in focus
This story was originally published at 22:09 IST on 18 October 2024
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MUMBAI – Shares of most information technology companies are expected to move in a narrow range next week, and others will take cues from earnings announcements, according to analysts. This week, the Nifty IT sectoral index closed 0.5% lower at 42106.50 points. In comparison, the benchmark Nifty 50 and the BSE Sensex declined 0.4% and 0.2%, respectively.
Of the 10 constituents of the Nifty IT index, five gained week-on-week, while the rest declined. Mphasis and Wipro were the top gainers. LTIMindtree and Infosys were the top losers.
"In the last one month, the IT index has not shown any directional trend," said Ruchit Jain, lead research analyst at 5paisa. "Even after the US Federal Reserve cut interest rates, IT stocks have neither corrected nor seen new highs. The Nifty IT index has traded within the range of 43600 (points) on the higher side and 41600 (points) on the lower side. As of now, this seems like a time-wise correction. Till the IT index's 41,600 support is intact, the sideways trend in IT stocks will continue. And a breakout above 43600 is required for the resumption of an upward trend."
In the week gone by, Wipro, HCL Technologies, LTIMindtree and Mphasis reported better-than-expected numbers for Jul-Sept. On the other hand, Infosys, L&T Technology Services, and Mastek reported mixed financial performance. On Saturday, Tech Mahindra will disclose its numbers for the September quarter, and in the week ahead Cyient, Coforge, Persistent Systems, Zensar Technologies, and Birlasoft will also announce their results.
"Amid key results from the IT sector during the week, it performed well and resisted the broader market weakness seen earlier," said Rajesh Bhosale, technical analyst at Angel One. "Going forward, we expect the sector’s strong performance to continue, with any dips likely offering buying opportunities."
TOP HEADLINES
* Six brokerages keep Infosys ratings unchanged, three raise target price
* Persistent Systems launches SASVA 2.0 to provide AI-powered solutions
* Brokers positive post Wipro Jul-Sept earnings but only one ups target price
* Govt agency serves notice to Swiggy, Zomato on consumer grievance redressal
* Analyst Concall: Cost optimisation remains clients' top priority - Infosys
* Analyst Concall: Don't see US polls hitting deal closures Oct-Dec - Wipro CEO
* Wipro sees momentum in Americas continuing, but lowers Oct-Dec guidance
* Discretionary spend of US fincl svcs sector up, will rise, says Infosys CEO
* Analyst Concall: Wage hike to hit LTIMindtree's margin by 200 bps Oct-Dec
* Earnings Review: LTIMindtree net profit up 10.3%, revenue up 3.2% on qtr
* Earnings Review: Wipro's Jul-Sep profit, sales growth highest in 7 quarters
* Earnings Review: Infosys Jul-Sept consol PAT below view, margin flat
* Zomato's board to meet Tuesday to consider raising funds via QIP
* Tanla Platforms Jul-Sept PAT rises over fivefold QoQ to INR 932.42 million
* Wipro sees Oct-Dec IT svcs sales down by up to 2% QoQ in constant currency
* Infosys ups FY25 sales growth guidance to 3.75-4.5%; margin view 20-22% unch
* Earnings Outlook: One97 Comm loss seen shrinking; 1 brokerage firm pegs PAT
* Analyst Concall: Client demand for AI delayed decision-making, says Mphasis
* Earnings Review: Mphasis Jul-Sept net profit up 4.7% on qtr, beats street
* India envisages instant payment nexus with Gulf nations, say govt sources
* L&T Tech Jul-Sept consol net profit rises 1.9% QoQ to INR 3.2 billion
* LTIMindtree announces merger of Germany-based arm with step-down subsidiary
* LIC sells 2.02% stake in Vakrangee over nearly 7 years via open market sale
* IPO Alert: Sagility India gets SEBI approval for public issue via OFS
* Newgen Software's Jul-Sept net profit rises 55.4% on qtr to INR 658.67 mln
* Cyient inks MoU with Business Finland for technology advancement
* HCL Tech confident of meeting FY25 guidance but cautious about macro issues
* Earnings Review: HCL Technologies Jul-Sep numbers beat Street's estimate
* HCL Tech ups lower end of FY25 guidance, now sees sales growth at 3.5-5.0%
* Could explore expanding RTGS for major trade currency settlement - RBI Das
* Wipro's board to meet Wed-Thu, consider bonus issue of shares
* Just Dial net profit rises 9% on quarter to INR 1.54 bln in Jul-Sept
Following are the resistance and support levels for the 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 | 1857.70 | 1.00 | 1889.10 | 1827.30 |
| Infosys | 1879.60 | (-)2.90 | 1962.80 | 1827.60 |
| L&T Technology Services | 5132.10 | (-)2.00 | 5344.00 | 5012.10 |
| LTIMindtree | 5991.70 | (-)6.50 | 6530.60 | 5690.60 |
| Persistent Systems | 5506.15 | 0.70 | 5621.30 | 5345.50 |
| Tata Consultancy Services | 4123.05 | (-)0.60 | 4182.60 | 4050.30 |
| Tech Mahindra | 1687.90 | 2.50 | 1735.40 | 1621.80 |
| Wipro | 548.65 | 3.90 | 577.60 | 510.40 |
| Nifty IT | 42106.50 | (-)0.50 | 42916.50 | 41433.00 |
| Nifty 50 | 24854.05 | (-)0.40 | 25087.90 | 24450.80 |
| S&P BSE Sensex | 81224.75 | (-)0.20 | 81990.30 | 80026.50 |
End
Reported by Darshan Nakhwa
Edited by Rajeev Pai
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