Wipro among 2 IT stocks at 52-week lows; here's why

Leading Indian information technology firms' shares hit 52-week lows in Monday's trade on BSE amid concern over banking sector turmoil in the US and Europe. Shares of Wipro fell 2.8% to hit a 52-week low of Rs 366, while shares of Mphasis declined 3.9% to hit a 52-week low of 1,814.4.

Meanwhile, other top IT firms such as TCS and Infosys were also trading near their 52-week lows.

Infosys and TCS have the highest exposure to regional banks in the United States that are gripped by a financial turmoil, analysts at JP Morgan said.

Regional banks in the United States account for 2-3% of their revenue, JP Morgan said in a note, adding that the exposure to the recently-collapsed Silicon Valley Bank could be 10-20 basis points for TCS, Infosys and smaller rival LTIMindtree, with the Tata group company in the lead.

All three companies might need to set aside provisions in the fourth quarter due to their exposure to SVB, JP Morgan note added.

"The collapse of SVB, Signature Bank and concerns of liquidity across the US and the European Union can further soften tech spends by banks over the short term in a year with slowing growth in bank tech budgets," global brokerage firm, which has an "underweight" rating on the sector, said.

Indian IT firms draw the bulk of their revenue from the banking, financial services and insurance (BFSI) sector. Within BFSI, their exposure to the US banks is on average 62% and Europe 23%, JP Morgan said.

At 12.39 am, shares of Wipro were trading 2.5% lower, while those of Mphasis were down 3.7% on BSE.

Meanwhile, amid concern over US markets, pharma stocks were also under pressure. Shares of Gland Pharma, Lupin and Granules India declined 2-2.5% in Monday's trade. Aurobindo Pharma, Pfizer, Zydus Lifesciences, GlaxoSmithKline Pharmaceuticals, and Sanofi India were also trading with cuts.

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