IT stocks underperform; TCS, Infosys slip 3% each

The Nifty IT index was trading 1.75 per cent lower at 15,100, with 5 constituents in the green and rest five in the red.

Shares of IT companies slipped in the intraday trade on Wednesday as the rupee recovered from all-time lows. 

At 12:13 am, shares of TCS were trading two per cent lower at Rs 2,050 a piece on BSE. The stock dropped as much as 2.87 per cent to Rs 2,030 during the trade. On similar lines, Infosys was down over two and a half per cent at Rs 698.75. HCL Tech was trading at Rs 1,045.50, down 2 per cent. 

In the sectoral landscape, the Nifty IT index was the sole loser on NSE. At the time of writing this report, the index was trading 1.75 per cent lower at 15,100, with 5 constituents in the green and rest five in the red. Wipro was the top loser on the pack, followed by Infosys, HCL Tech and TCS. 

TCS is slated to announce its Septemeber quarter earnings on Thursday. A majority of the analysts expect IT companies to report robust numbers, given the favourable macro and global environment.

"We expect IT firms to report largely higher sequential EBIT margin in 2QFY19E aided by rupee depreciation, operational efficiency, wage hike largely behind and revenue growth. Among top-tier IT firms, TechM’s margin is expected to expand by 106 bps QoQ, aided by favourable currency movement and improved operational efficiency. Within our mid-cap universe, Cyient is expected to report the strongest margin performance (+184bps QoQ)," said Harit Shah, Research Analyst (IT) at Reliance Securities.