Shares of IT majors Infosys, Wipro and TCS have recovered up to 20% in from their 52-week lows with the equity market erasing losses during the last two months. While Infosys has recovered 20%, stock of Wipro has risen 8.33% from its 52 week low. Shares of TCS too have climbed 15.58% from their yearly low. The recovery in IT stocks comes on the back of slowing down of interest rate hike cycle in the US. The three IT majors cater to clients worldwide and relief on interest rate hike front in the US sparked a rally in the IT stocks.
While Infosys shares touched their 52-week low of Rs 1,355.50 on September 26,stock of Wipro hit its 52-week low of Rs 372.40 on October 17. Similarly, shares of TCS reached a 52-week low of Rs 2,926 on September 26.
Other major indices too have recovered since September end. Sensex has risen 5,556 points or 9.72% since September 26. BSE IT index too surged 3,158 points or 11.62% during the period.
In today’s trade, the three IT shares were trading on a mixed note.
Wipro stock fell 0.52% intraday to Rs 403.10 against the previous close of Rs 405.20. Wipro shares have declined 43.6 per cent this year and fallen 36% in the last one year.
Shares of Infosys too were trading on a flat note today. The IT stock fell 0.76% to Rs 1616 on BSE. Infosys stock has declined 14.43 per cent this year and fallen 5.68% in the last one year.
On other hand, shares of TCS gained 0.14% to Rs 3,401 in late morning deals today. The stock has declined 8.92 per cent this year and fallen 3.63% in the last one year. The BSE IT index fell 63 points to 30,376 in the current session.
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With Sensex and Nifty have been hitting fresh all-time highs this week, here’s a look how this rally in the market can impact IT stocks.
Abhijeet from Tips2Trade said, “A strong recovery in global IT stocks due to lower inflation and thereby an expected halt in interest rate hikes has led to a rally in IT stocks in India including Wipro. A daily close above Rs 406 could lead to a further uptrend till 416-420. Strong support is now seen at 389. After a sustained decline since the last six months due to overstretched valuations coupled with recession fears, IT stocks in India including TCS & Infosys have recovered well from their recent lows. TCS faces major resistance at Rs 3420 and investors are advised to book profits at current levels and wait for a dip near Rs 3250- Rs 3255 to re-enter for higher targets of Rs 3625- Rs 3690. Similarly, Infosys faces massive resistance at Rs 1631. Investors should book profits and wait for lower levels near Rs 1546- Rs 1550 to buy for targets of Rs 1728- Rs 1760 in the near term.”
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Analysts on Wipro stock
Manoj Dalmia, founder and director, Proficient Equities said, “Wipro stock made a high of Rs 700 and now is available at almost half rate at about Rs 404. The selling seems to have slow down and the stock may remain sideways for a while till a range of Rs 454. Any closing above this can create an upmove. Long-term investors can start accumulating considering its strong fundamentals and order book pipeline with a long term target of Rs 719 which was the 52-week high.”
Ravi Singhal, CEO, GCL said, “As we can see from the Nifty IT index, after the Nifty made a new high, Wipro is one of the weakest large cap stocks in IT. We believe this is a dead cat bounce, but it can touch 455 in this bounce.”
Ravi Singh, Vice President and head of research, Share India said, “Wipro share price is showing lower levels buying after the company launched a strategic cybersecurity consulting offering in Europe which comes on the heels of a series of acquisitions in the consulting space. The same is considered a part of the firm’s vision to build a global cybersecurity consulting. The move in the counter may continue to the Rs 420 levels in near term.”
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Infosys stock
Shares of Infosys may breach the level of Rs 1900 in the long term.
Ravi Singh, vice President and head of research, Share India said, “Infosys is currently witnessing lower levels buying and short coverings taking cues from rupee weakness and recovery in benchmark indices. The technical formation in the stock and the momentum oscillators suggests a strong move ahead. The momentum may push the Infosys stock to higher levels of Rs 1680 in coming trading sessions.”
Manoj Dalmia, founder and director, Proficient Equities said, “Infosys saw some buying action in the last few weeks. The price may halt at current levels for a week or so and can go up towards the peak of Rs 1939. Investors can buy this fundamentally strong stock with a long-term perspective.”
TCS
The IT stock can go up to Rs 4,000 in the long term.
Ravi Singh, Vice President and head of research, Share India said, “TCS is India’s leading company providing IT services whose organic revenue growth remains strong and the company has the best margin in the industry. The company is almost debt free. Its ROE is good and the company also pays a dividend of 56.35 per cent. On the technical setup also, TCS share price may witness more strength to pull the stock towards the levels of Rs 3550 in the near term.”
Manoj Dalmia, founder and director, Proficient Equities said, “TCS saw some buying recently. We can expect some consolidation taking place in the range of Rs 3000-3300. This fundamentally strong stock can be bought at these levels with a target of Rs 4000 on the upside with a long-term perspective.”