IT sector valuation premium over Sensex at highest level in over a decade

BSE IT Index trading at P/E multiple of 34.3x - nearly 29% higher than that of Sensex

India’s leading information technology (IT) services companies, such as Tata Consultancy Services, Infosys, Wipro, and HCL Technologies, among others, are the flavor of the season on D-Street. The IT industry valuation premium over the broader market is now at its highest level in more than a decade as investors continue to accumulate the shares of top IT companies and go underweight on at-risk sectors, such as banking, oil and gas, metals, and even fast-moving consumer goods companies (FMCG). 

The BSE IT Index is currently trading at a trailing price-to-earnings (P/E) multiple of 34.3x — nearly 29 per cent higher than the