Wipro, Mphasis, Mindtree shares hit new 52-week highs; IT stocks rally, Nifty IT index up 1%

IT companies stocks were in focus today as Wipro, Mphasis and Mindtree shares hit 52-week high in Friday’s trading session. Wipro shares jumped 2.34 per cent to scale a fresh 52-week of Rs 319 apiece, Mphasis shares added 1.57 per cent to Rs 1,375 apiece while Mindtree shares rose 1.39 per cent to Rs 1,292.45 apiece in today’s trade. In comparison, S&P BSE Sensex was up 0.16 per cent at 39,041.66. While Nifty IT index was ruling 1.05 per cent higher hitting a fresh 52-week high of 20,032.20 led by gains in Wipro, Tech Mahindra, Mphasis, HCL Technologies and TCS. The IT index surpassed its previous high of 20,014.65. In today’s trade, except for Coforge, all the index constituents were trading in the positive territory. “The volatility in exchange rates over the past three months brings the focus back to the impact on the reported financials of the Indian IT services players,” said foreign brokerage firm CLSA in its report.

In the noon deals, all the index constituents were up in the range of 0.14-2.08 per cent. While Coforge shares were trading 2.48 per cent down at Rs 2,201 apiece. The foreign brokerage firm also added that the ensuing rupee reset poses a risk to consensus FY22/FY23 EPS estimates. “But we expect company commentary of improving deal activity and sustained cost of execution control to keep the impact minimal. The top picks of the brokerage are Infosys and HCL Technologies.

At 27th Annual CITIC CLSA Flagship Investors’ forum TCS, Infosys, and Wipro indicated revenue growth is becoming broad-based with improving business sentiment. “We still see room for incremental upside though after 40 per cent move in the Nifty IT index and a 69 per cent/83 per cent move in the mid/small cap IT index since April 2020, we expect moves to be more stock specific,” it added.

In a previous report, research and brokerage firm Nirmal Bang upgraded its rating on IT sector to ‘neutral’ with a market cap-weighted upside of 10 per cent. While Senior Research Analyst Nirali Shah of Samco Securities has recommended to buy Mphasis stock on dips. In its report, it added that exposure to travel, tourism and energy is an issue for many mid-cap players amidst a pandemic, but Mphasis has less than 2 per cent exposure to these sectors, making it comparatively less vulnerable.