Shares of information technology (IT) companies were trading firm in an otherwise weak market as investors sought safer haven in the sector, owing to a sharp depreciation in Indain Rupee versus the US dollar.
At 12:04 pm; the Nifty IT index, the top gainer among sectoralal indices, was up 2 per cent, as compared to 0.83 per cent decline in the Nifty50 index.
Tata Consultancy Services (TCS), Mindtree and L&T Technology Services (LTTS) were up 3 per cent each, while Infosys, Tech Mahindra and Larsen & Toubro Infotech gained 2 per cent each on the National Stock Exchange (NSE) in intra-day trade. The IT services companies, who make most of their revenues servicing clients in US tend to benefit from a weaker rupee.
On Monday, the rupee plunged to a record low while bond yields jumped on concerns over higher inflation and widening current account deficit after crude oil prices surged past the $130/bbl amid intensifying Russia-Ukraine war. CLICK HERE FOR FULL REPORT
Analysts at Emkay Global Financial Services expect IT spending to remain strong across verticals, aided by a consistent surge in demand for cloud, data analytics, digital transformation, cybersecurity and AI.
As per management commentary across companies, the BFSI vertical saw good growth momentum in October-December quarter (Q3) and the demand outlook remains healthy as banks look to continue their digital transformation and the retail vertical is seeing increased client spending on initiatives such as omnichannel commerce, consumer experience, supply chain transformations and large scale cost take outs.
The brokerage firm expects the revenue growth momentum to remain intact in FY23, led by secular broad-based demand trends and healthy deal wins. The pricing environment remained stable, with clients becoming more amenable for rate increases for projects involving niche talent; also the clients are agreeing to COLA clauses in the deals unlike in the past.
IT major TCS was also in focus as the company said its Rs 18,000 crore share buyback offer will open on March 9 and close on March 23. On February 12, the company announced the share buyback programme entailing 40 million shares at Rs 4,500 apiece. TCS fixed April 1, 2022 as the last date for settlement of bids on stock exchanges which may even happen earlier, according to a BSE filing.