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IT shares extend gain; Nifty IT index up 5% in two days

Infosys, TCS, HCL Tech, Wipro and Tech Mahindra were up 4% to 8% in past two trading days

SI Reporter  |  Mumbai 

Nifty IT index up 5%

Shares of information technology (IT) companies were trading higher for the second straight day, with the Nifty index gaining 5% in past two days on the National Stock Exchange (NSE).

At 10:04 am; the Nifty index was trading at 10,592, up 2.2%, extending its Monday’s 2.7% surge on the NSE. On comparison, the Nifty 50 index, which trading at 9,812, was up 1.5% during the period.

So far in 2017, the Nifty index had underperformed the market by falling 3% against 18% rise in the benchmark index till Friday, July 7, 2017.

and Tata Consultancy Services (TCS) were up 3% each, while Tech Mahindra, Wipro and HCL Technologies were gain 2% on the NSE.  All these stocks have rallied between 4% and 8% in past two trading sessions.

companies will kickstart their first quarterly (April-June) earnings seasons for the current season from current week, with board to consider Q1 results & interim dividend on Thursday, July 13, 2017, while will declare its Q1 results on Friday, July 14, 2017.

Edelweiss Securities estimate the top-5 players, TCS, Infosys, Wipro, HCL Technologies and Tech Mahindra to clock -1.0- 4.2% QoQ USD revenue growth in Q1FY18 Q1 (April-June) quarter earnings.

“The appreciation of GBP, EUR and JPY against USD will lead to 40-90 bps revenue tailwinds. However, margins will be under pressure on account of visa expenses, wage hikes and 3.9% INR appreciation against USD,” the brokerage firm said in results preview.

However, analysts expect Indian companies to show pickup in growth on seasonality and strength in BFSI and manufacturing sector. Any turnaround in retail and healthcare verticals, which have been a key revenue growth headwind, would reinforce confidence in revenue growth for the sector.

“We expect Indian companies to report healthy growth in digital related services (in excess of 30%), while legacy services will continue to remain soft during this transitional phase,” added report.

First Published: Tue, July 11 2017. 10:24 IST