BSE IT index at an all-time high, up 10% in Dec on hopes of strong Q3 show

IT stocks were outperforming in trades on Thursday on hopes of strong earings show for the December quarter. The BSE IT index hit a new all-time high at 37,870, and was up a per cent at 37,814, as against a 0.2 per cent rise on the BSE Sensex.

So far in trade on Thursday, CyberTech was the major gainer. The stock had zoomed over 18 per cent to Rs 236. HCL Infosys,Ramco Systems, Tanla Solutions and Suvidhaa Infoserve were the other major gainers, up 4-5 per cent each. Among frontliners, Tech Mahindra, Wipro and HCL Technologies had gained around 1.5 per cent each. TCS and Infosys were up 0.8 per cent and 0.5 per cent, respectively.

On the flip side, Aurionpro Solutions, 63 Moons Technologies, Brightcom Group, D-Link India and NIIT were the major losers, down 2-4 per cent each.

IT shares have been in demand since mid-December after Accenture reported strong revenue and upgraded its annual guidance by a massive 700bps. So far this month, the BSE IT index has surged 10.2 per cent as against a 1.5 per cent gain on the BSE benchmark 30-share index.

IDBI Capital in its earnings preview for the IT sectors, sees demand outlook for all the IT companies to remain robust for Q3Fy22 and for FY22E. Amongst largecaps, they forecast a revenue growth in the range of 3-4.4 per cent on a QoQ basis in CC terms. for midcaps the CC growth is expected to be in the range of 3.5-6.5 per cent on a QoQ basis. Broadly, they expect midcaps to outperform largecaps.

Among individuals stocks, they expect Infosys to up guidance from 16.5-17.5 per cent to 18-19 per cent and Wipro to guide 2-4 per cent for Q4FY22E.

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L&T Infotech, Mindtree, Birlasoft and Tech Mahindra are expected to report dollar revenue growth of 6.5 per cent QoQ, 5.5 per cent QoQ, 3.7 per cent QoQ and 4 per cent QoQ, the report added.

So far this month (as of December 29), 63 Moons Technologies was the top gainer among the BSE IT index. The stock had more-than-doubled in a single month. CyberTech Systems, Expleo Solutions, Brightcomp Group, D-Link India and Kelton Tech Solutions were the other major gainers - up 30-40 per cent each.

Among the Sensex 30 components within the IT space, Tech Mahindra had rallied nearly 16 per cent. HCL Technologies had surged 13.5 per cent. Infosys and Wipro were up around 10 per cent each.