The markets closed flat but most IT stocks were under pressure. Even while the broader index – Sensex and Nifty recovered from the sharp cuts the previous day, the Nifty IT index was among the few that closed the session with significant losses. HCL Tech clocked significant losses.
Analysts explained that the growth concern about the future outlook of the IT firms may have dented sentiment today. “The Q3 results are also likely to be challenging. Order especially larger contracts have been an area of concern. In Q3, we are expecting direction and clarity on the order pipeline and future outlook. That will define the scope for future strategy. As a result, investors are cautious in trade today,” said Deven Choksey, Founder and MD of DRChoksey FinServ.
Ajit Mishra, Senior Vice President of Religare Broking added that “many IT stocks are seeing profit booking ahead of earnings as the Nifty IT index is still near its all-time high.”
Here are 5 IT stocks that are down in an up market
HCL Technologies: The stock was among the key losers on the Nifty IT index on January 07. It slipped 1.86% to close the session at Rs 1,916.75. The stock contributed 0.21% to the fall of Nifty IT. HCL Technologies is all set to report its third quarterly earnings on January 13. The company had announced a minor salary hike of 1-4% for junior employees. However, that was not adequate to convince the street as the hike was significantly less than the expected 7% levels.
TCS: The Tata Group’s IT stock slipped 1.56% to end at Rs 4,031. It contributed more than 50% to the decline of the IT index. The IT bellwether is expected to report Q3 revenue growth of 6.3% year-on-year to Rs 6,445.63 crore on January 9 as compared to Rs 6,060 crore a year ago in the same quarter. One of its crucial deals, the BSNL deal peaked in Q2 and the revenue contribution from this is likely to decline this quarter.
Tech Mahindra: The stock finished the day 0.99% lower at Rs 1,669.65, contributing 14% to the fall of Nifty IT. The company will be releasing its quarterly earnings for Q3 FY25 on January 17. Select brokerage houses have cut down their rating on the stock. Valuation concerns on the back of a decline in earnings triggered the selling in this counter.
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