Tech funds run into rough weather in CY22, IT firms' stocks do well

Indian IT services sector is expected to benefit from digital transformation, particularly aided by cloud adoption.

Technology funds are among the worst performers in sectoral funds this year, with returns of -15.5 per cent, according to data from Value Research.

Information Technology (IT) stocks corrected in a relatively strong demand environment and robust revenue growth guidance. Correction has been driven by increase in interest rates, fears of recession in key client geographies and risk to margins.

IT bellwethers TCS, Infosys and Wipro have shed 15 per cent, 25 per cent and 36 per cent.

According to analysts, the Indian IT services sector would continue to benefit from the ongoing digital transformation, particularly aided by cloud adoption.