Mutual funds were seen selling shares of KPIT Technologies (KPIT Tech), HCL Technologies, Tech Mahindra, Coforge, Tata Elxsi and Mphasis among other technology stocks in January. They were seen buying shares of TCS, Infosys, Wipro, LTIMindtree, Persistent Systems and Birlasoft, Brightcom Group among others, data compiled from PRIME Database suggested. Analysts said a few IT stocks look attractive at prevailing levels.
“Buoyant deal activity in Q3FY23 surprised us and quarter-to-date deal announcements also signalled a similar narrative. We saw resilience in tech spending in this paradox of an uncertain macro environment and robust deal activity. Our top picks are Tech Mahindra and TCS among Tier-I firms and Coforge and Persistent Systems from Tier-II,” said Elara Securities
In TCS, mutual funds raised stake to 3.39 per cent in January from 3.32 per cent in December; Infosys saw mutual funds increasing exposure to 15.57 per cent from 15.43 per cent. Mutual funds increased exposure to 2.84 per cent in Wipro from 2.77 per cent in December.
The biggest change in MF exposure was seen in Birlasoft where the institutional investor increased stake by 69 basis points to 19.32 per cent from 18.63 per cent. Zensar Tech saw MFs increasing exposure by 51 basis points to 11.81 per cent from 11.30 per cent. Cyient saw MF exposure rising 47 basis points to 24.67 per cent from 24.20 per cent. LTIMindtree (6.23 per cent stake in January), Brightcom group (0.07 per cent)and Tanla Platforms (0.06 per cent in January) was negligible MF buying for the month.
Meanwhile, HCL Tech saw MF slashing exposure by 98 basis points to 7.95 per cent from 8.93 per cent; the institutional investor cut exposure in TechM by 25 basis points to 11.65 per cent from 11.90 per cent. in KPIT Tech, MF reduced exposure to 7.54 per cent from 7.70 per cent. MFs decreased exposure in L&T Technologies, Mphasis, Tata Elxsi, Coforge and Oracle Financial by 30 basis points in January.
G Chokkalingam of Equinomics Research & Advisory noted that there has been moderation in employee attrition, rupee exchange rate continues to be weak and that valuations still remain highly attractive for many IT stocks against historical levels. He likes Oracle Financial, Cyient, Zensar Technologies, Sasken Tech and Wipro among IT names in that order.
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