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IT stocks regained momentum in Tuesday's session turning positive after 4 consecutive days of losses. The Nifty IT index outperformed the benchmarks, rising 1 percent in intra-day deals as against a 0.3 percent rise in the Nifty50 index.
8 of the 10 constituents in the index are in the green with Tech Mahindra rising the most, nearly 6 percent on the back of strong earnings. It also boosted the other IT stocks.
L&T Tech rose over 4 percent while Mphasis added 3 percent in intra-day deals. L&T Infotech and MindTree were also up 1-2 percent each.
Tech Mahindra's net profit rose 25.8 percent YoY at ₹1,338.70 crore in the September 2021 quarter as compared to ₹1064.60 crore in the same quarter last year. Revenue for the quarter rose 16.1 percent YoY at ₹10,881.30 crore versus ₹9,371,80 crore in the year-ago quarter.
The IT firm further announced that revenue in dollar terms rose over 16 percent YoY at $1,472.6 million while the revenue growth in constant currency terms stood at 7.2 percent.
Post the earnings, the company stated that it remains committed to delivering long-term sustainable and profitable growth for the company.
The index had declined recently after IT major TCS' results did not meet analyst expectations.
Past performance
Overall, the Nifty IT index has been a consistent performer, rising over 65 percent in the last 1 year as against a 51 percent rise in the Nifty50 index. All constituents of the IT index gave positive returns in this period with 6 surging over 100 percent.
MindTree rose the most, up 227 percent in the last 1 year while L&T Tech and Mphasis added 164 percent and 142 percent, respectively. Coforge, L&T Infotech and Wipro also rose over 100 percent each.
The index has also gained 39 percent in the last 6 months and 19 percent in the last 3 months.
Going ahead
While the sector has witnessed a small blip in the last 1 month, experts are strongly bullish on the sector. According to experts, many factors are boosting the growth for this sector like global digitisation, technological advancement, Digital India roadmap, among others. The revival of the US economy and the strengthening of the dollar is also good news for the sectors. Even when the whole nation was battling the pandemic, deal wins for the sectors did not get an impact but rather kept rising indicating the potential and demand for tech services across the globe.
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