- Indian IT stocks surged after TCS posted strong June quarter results easing slowdown fears
- Nifty IT index gained over 4.3% intraday, while Nifty 50 rose marginally by 0.05%
- TCS led gains with nearly 6%, followed by HCL Tech up 5.9% as of 1 pm Monday
Indian IT stocks outperformed the broader market on Monday, with buying interest returning across large-cap and mid-cap technology companies after Tata Consultancy Services' stronger-than-expected June quarter earnings eased concerns over a slowdown in global IT spending.
Nifty IT index has gained over 4.3% in the intraday session, while the Nifty 50 remained muted around the 24,220 level, gaining only 0.05%.
TCS was leading the Nifty IT index rally with gains close to 6%, followed by HCL Tech, which has gained 5.9% as of 1 pm today.
Among other IT majors, Newgen Software and Zensar Technologies rallied over 8% and 6%, respectively, during Monday.
IT Stocks Rally on TCS Boost
TCS Results Spark IT Rally
After TCS reported better-than-expected quarterly revenue, healthy deal wins, and resilient demand from the banking and financial services segment, investors' sentiment improved, and the sector witnessed renewed buying interest since Friday.
Furthermore, TCS CEO K Krithivasan said in a recent interview that the company is ramping up its AI ambitions by assembling a specialised team of up to 8,900 forward-deployed engineers and evaluating acquisition opportunities in artificial intelligence, data security, and cybersecurity. The expansion highlights the IT giant's focus on AI-led growth despite growing concerns that the technology could disrupt the conventional outsourcing model.
Also Read | TCS Bets Big On AI, Plans Up To 8,900 Forward-Deployed Engineers, Eyes Acquisitions
Investors Looking Forward to HCL Tech Today
Investors are now awaiting HCL Technologies' results for further cues on demand trends, margins and deal momentum.
According to Bloomberg estimates, HCL Tech's consolidated revenue is expected to rise 2% quarter-on-quarter, while net profit is also projected to increase 2%.
A positive earnings report could further boost investors' confidence across the sector.
Other Triggers Behind the Rally
Apart from earnings optimism, a weaker rupee continued to support export-oriented IT companies, which derive a significant share of their revenue from overseas markets. The rally was also aided by value buying after the sector's prolonged correction earlier this year, with investors returning to quality technology stocks at attractive valuations.
Also Read | Zensar Technologies Shares Up 4%: Should Investors Buy, Sell Or Hold?
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