TCS, Wipro, Infosys, HCL Tech and TechM: Top 5 IT stocks added Rs 79,000 crore today

Five Tier 1 IT biggies namely TCS, Wipro, HCL Technologies and Tech Mahindra added a total of Rs 79,000 crore to their combined market capitalisation (m-cap) ahead of the kick start of IT sector earnings later in the day.

Ahead of its earnings, shares of TCS were trading 3.41 per cent higher at Rs 3,321.65. The m-cap of the IT major jumped Rs 41,036.26 crore to Rs 12.16 lakh crore from Rs 11.75 lakh crore a day ago.

Infosys shares were up 2.41 per cent at Rs 1,483.80. The m-cap of the second largest IT major jumped Rs 20,335.09 crore to Rs 6.25 lakh crore from Rs 6.05 lakh crore a day ago.

HCL Technologies, the third largest IT player, saw its shares rising up 3.3 per cent to Rs 1,066.85. The m-cap of this IT major rose Rs 9,552.10 crore to Rs 2.89 lakh crore from Rs 2.80 lakh crore a day ago.

Wipro added Rs 5,070.19 crore in market capitalisation while  Tech Mahindra added Rs 2,926.21 crore to its m-cap in Monday’s trade.

Shares of Wipro were up 2.49 per cent to Rs 391.65 while those of Tech Mahindra gained 2.92 per cent to Rs 1,015.35.

The five IT firms, except for Tech Mahindra (down 4-6 per cent YoY), are expected to report positive year-on-year growth in profit on a single-digit growth in dollar revenues .

The top line growth for the IT sector will moderate to high-single digits to low-teens on an year-on-year (YoY) basis, said Kotak Institutional Equities, which felt the EBIT margin for the sector has bottomed out and will likely improve, although moderately.

In a preview note, the brokerage said: “TCS and HCL Tech should report relatively better quarter, while TechM and Mphasis should lag. We expect investor focus on growth/decline in IT budgets for CY2023, the state of demand, and the pace of decision making.”

IDBI Capital expects top five IT firms to register dollar growth of 0.7-2.8 per cent QoQ in constant currency (CC) terms aided by 0-10 basis points cross currency tailwinds.

In revenue terms, HCL Tech is seen registering 2.8 per cent QoQ revenue growth in CC terms, led by product revenues. Wipro is expected to report 1.2 per cent QoQ revenue growth in CC terms.  IDBI Capital sees Infosys logging a 1 per cent  QoQ revenue growth, 0.7 per cent CC growth for TCS and nil sequential CC growth for TechM.

IDBI Capital expects Infosys to revise revenue guidance from 15-16 per cent to 15.5-16.5 per cent. “We expect Wipro to guide 0-2 per cent for Q4FY23,” it said while picking Infosys as it preferred largecap pick.

Emkay Global said its pecking order in the tier 1 IT pack is Wipro, followed by Infosys, Tech Mahindra, HCL Tech and TCS.

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