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Informist, Friday, Jan. 17, 2025

MUMBAI – Shares of information technology companies are expected to move in a range next week on the back of mixed earnings expected from tier-2 IT companies and lack of clarity on discretionary spending, analysts said. "IT stocks will be range bound in the near term. We have already seen quite a good chunk of correction in all IT stocks," a research analyst at a domestic brokerage firm said. Further movement in IT stocks will be based on the commentary on client budgets in Feb-Mar, the research analyst added. 

IT stocks were under pressure this week as clarity on discretionary spending will probably be known only in Jan-Mar, a research analyst at another domestic brokerage firm said. Commentary by Infosys' management post the December quarter earnings suggested that the March quarter earnings would be on the weaker side on a sequential basis for the company, the research analyst said. Though many companies have been talking about green shoots in verticals and geographies, these are not reflected in their numbers.  

Shares of HCL Technologies and Infosys, which fell after the management commentary on an expected weaker March quarter, will recover in the next week by around 2-3%, Rishubh Vasa, reserach analyst at Indsec Securities, said. 

IT giants HCL Technologies., Infosys, LTIMindtree, Tech Mahindra, Wipro, and L&T Technology Services detailed their earnings for the December quarter this week. Infosys' net profit and revenue for the December quarter managed to beat the analysts' estimate. Wipro's consolidated revenue for the December quarter was unchanged sequentially at INR 223.19 billion, while its net profit rose 4.5% on quarter to INR 33.54 billion. It released the quarterly results Friday after market hours. HCL Technologies consolidated net profit rose 8.4% on quarter and revenue was up 3.6% from a quarter ago. Tech Mahindra's bottom line missed the Street's view. LTIMindtree's consolidated net profit of INR 10.85 billion for the quarter, fell 13.2% sequentially while its revenue rose 2.4% to INR 96.61 billion. L&T Technology's consolidated net profit for the quarter rose by just 0.9% on quarter, while revenue rose 3.1%.

The Nifty IT index closed 2.7% lower at 42032.20 points this week. Of the 10 constituents in the index, only L&T Technolgy gained over the week. HCL Tech and Coforge were among the top losers in the index. Next week, support for the index is seen at 41630.90 points and resistance at 42695.70 points.

The Nifty IT index will not breach the 41800 level next week as the companies announcing results are expected to post positive to neutral earnings for the quarter. "..but if any surprises come, that might dent the confidence more and it (index) might come down," Vasa of Indsec Securities said. "...till the time we are above 41800 we are good on IT for the next move, otherwise we might see lower levels," Vasa added. "We expect it (IT index) to fall more. He expects the index to be stable around 40400 points  something in the range of 40400 for the next two-three months or even for six months.

TOP HEADLINES

* Analyst Concall: More US discretionary spend to revive retail ops - Infosys
* Analyst Concall: LTIMindtree sees growth moment continuing in Jan-Mar
* Earnings Outlook: Weak mfg scvs, furloughs to drag Tech Mahindra's earnings
* Earnings Review: LTIMindtree Oct-Dec PAT misses Street view, down 13% QoQ
* Infosys to hire over 15,000 freshers in FY25, more than 20,000 in FY26
* Earnings Review:Infosys consol PAT beats Street's view, grows most in 3 qtrs
* Infosys ups FY25 sales growth guidance to 4.5-5.0%, margin unch for 8th time
* Mastek Oct-Dec consol PAT falls 26.4% QoQ to INR 947.1 million
* Intellect Design partners US co Confianza to enhance underwriting efficiency
* NCLAT admits Meta plea on privacy policy, to decide on CCI order stay Jan 23
* On4Off Trading moves HC to bar NPCI from using its patented UPI pay method
* Earnings Review: Oracle Fincl Oct-Dec consol PAT dn 6.3% QoQ, sales up 2.5%
* Meta India apologises for Zuckerberg gaffe on Indian poll result
* Happiest Minds, Coca-Cola Beverages Vietnam collaborate for GenAI solutions
* L&T Tech Oct-Dec consol PAT rises nearly 1% QoQ to INR 3.22 billion
* Earnings Outlook: Wipro's growth seen dn QoQ, weakest among large-cap IT cos
* Persistent Systems launches AI-powered contract management solution
* Earnings Outlook: Infosys PAT seen up 4% QoQ; may up FY25 sales guidance
* Earnings Outlook: Banking, mfg svcs to drive LTIMindtree's Oct-Dec revenue
* Parliamentary panel to summon Meta over Zuckerberg's remark on India polls
* Earnings Outlook:Coforge QoQ revenue growth may not be as strong as Jul-Sept
* Vodafone Idea ties up with HCL Tech for 4G, 5G network automation
* HCL Tech, Microsoft partner to transform contact centres with generative AI
* Analyst Concall: HCL Tech sees 2025 spends up, cautious on world landscape
* HCL Tech to step up fresher recruitment in FY26
* HCL Tech in pact to modernise Carrix's port ops with AI-driven digital tech
* Earnings Review: HCL Tech sales below Street view on weak IT, business svcs
* HCL Tech ups lower end of FY25 guidance, now sees sales growth at 4.5-5.0%
* PRESS: Infosys files countersuit against Cognizant, CEO in US court
* Earnings Outlook: Seasonality may shore up HCL Tech sales, margin growth QoQ

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

US$1 = INR 86.61

Reported by Arya S. Biju

Edited by Akul Nishant Akhoury

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