Shares of information technology (IT) companies, on Tuesday, were in focus at the bourses, with six stocks, Infosys, Mindtree, L&T Technology Services (LTTS), Sonata Software, Coforge and Intellect Design Arena from the S&P BSE IT index hitting their respective record highs in intra-day trade on expectation of strong earnings.
At 10:04 am, the S&P BSE IT index, the top gainer among sectoral indices, was up 1.5 per cent, as compared to 0.35 per cent rise in the S&P BSE Sensex. The IT index hit an intra-day high of 26,784 points, and is 1 per cent away from its record high of Rs 27,074 on January 14, 2021. Thus far in the month of March, the BSE IT index has rallied 10 per cent, against 3 per cent gain in the Sensex.
The $1.9 trillion Covid relief bill stimulus will boost the US economy and will, in turn, positively impact the IT industry (which generates majority of its revenues from this geography), ICICI Securities said in a note.
Among individual stocks, Infosys shares hit a record high of Rs 1,398, up 2 per cent on the BSE. The IT bellwether's stock surpassed its previous high of Rs 1,392.70, touched on January 13, a day of announcement of the October-December quarter (Q3FY21) results. Since January 13, post Q3FY21 results, Infosys' share price has gained 1.96 per cent, against 2.2 per cent rise in the benchmark index.
Besides, Infosys, today, informed the stock exchanges that a meeting of the board of directors of the company will be held on April 13 & 14, 2021, to approval and take on record the audited consolidated financial results of the Company and its subsidiaries for the quarter and year ending March 31, 2021.
Analysts at ICICI Securities expects Infosys to be a key beneficiary of multi-year growth in digital technology considering its digital prowess and its ability to provide an end to end solution. This, coupled with increase in outsourcing in the US and Europe, vendor consolidation opportunities, captive carve outs and cost takeout deals will further boost revenues. In addition, healthy deal wins are expected to help the company make a steady improvement in financials.
“Infosys has consistently outperformed TCS over the past few quarters and also narrowed the margin gap between the two companies. As a result, we expect the PE multiple discount between Infosys and TCS to narrow,” the brokerage firm had said in Q3FY21 results update. It maintains ‘buy’ rating on Infosys with a target price of Rs 1,610 per share.
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