Shares of IT majors Infosys, Wipro and TCS have recovered up to 20% from their 52-week lows, wiping out stock market losses during the past two months. While Infosys has recovered 20%, Wipro stock is up 8.33% from its 52-week low. Shares of TCS have also gained 15.58 per cent from their yearly low. The recovery in IT stocks has been on the back of slowing interest rate hike cycle in the US. The three major IT companies serve customers across the globe and IT stocks gained on relief from interest rate hike in the US.
While Infosys shares touched their 52-week low of Rs 1,355.50 on 26 September, Wipro’s shares touched their 52-week low of Rs 372.40 on 17 October. Similarly, TCS shares hit a 52-week low of Rs 2,926 on September 26.
Other major indices have also recovered since late September. Since September 26, the Sensex has gained 5,556 points or 9.72%. The BSE IT index has also gained 3,158 points or 11.62% during the period.
In today’s trade, there is mixed trading in three IT stocks.
Wipro stock fell 0.52% to Rs 403.10 against previous close of Rs 405.20. Wipro shares have declined 43.6 per cent this year and 36 per cent in the last one year.
Infosys shares were also trading on a flat note today. The IT stock fell 0.76% to Rs 1616 on BSE. Infosys shares have declined 14.43 per cent this year and 5.68 per cent in last one year.
On the other hand, TCS shares gained 0.14% to Rs 3,401 in morning deals today. The stock has declined 8.92 per cent this year and 3.63 per cent in last one year. In the current session, the BSE IT index fell 63 points to 30,376.
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As Sensex and Nifty hit new record highs this week, here’s a look at how this rally in the market could impact IT stocks.
Tips2Trade’s Abhijeet said, “A strong recovery in global IT stocks due to low inflation and thus expected pause in interest rate hikes has led to gains in IT stocks in India including Wipro. Daily close above Rs 406 There could be further downsides.” Upward trend till 416-420. Strong support is now being seen at 389. IT stocks in India, including TCS and Infosys, have recovered well from their recent lows, after falling continuously for the past six months due to recession fears as well as overvalued valuations. TCS faces major resistance at Rs 3420 and investors are advised to book profits at current levels and wait for further decline near Rs 3250- Rs 3690 levels to re-enter for higher target of Rs 3625- Rs 3690 levels. Similarly, Infosys is facing heavy resistance at Rs 1631. Investors should book profits and wait for lower levels of Rs 1546-1550 levels to buy in the near term for a target of Rs 1728-1760 levels.
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Wipro Stock Analysts
Manoj Dalmia, Founder and Director, Proficient Equities said, “Wipro stock made a high of Rs 700 and is now available at Rs 404, almost half the rate. 454 range of Rs. Any close above this can constitute an upmove. Long-term investors can start accumulating given its strong fundamentals and order book pipeline with a long-term target of Rs 719, which was its 52-week high.
Ravi Singhal, CEO, GCL said, “As we can see from the Nifty IT index, Wipro is one of the most vulnerable large cap stocks in IT after Nifty made a new high. We believe It is dead cat bounce, but in this bounce it can touch 455.
Ravi Singh, Vice President and Head of Research, Share India, said, “Wipro share price is showing buying at lower levels after the company launched a strategic cyber security consulting offering in Europe, which comes on the heels of a series of acquisitions in the consulting space.” This is considered a part of the firm’s vision to build a global cyber security consultancy. The counter may continue to move towards Rs 420 levels in the near term.
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Infosys share can cross Rs 1900 level in long term.
Ravi Singh, vice-president and head of research, Share India, said, “Infosys is currently witnessing lower-level buying and short-covering due to rupee weakness and correction in benchmark indices. The technical formation and momentum oscillators in the stock suggest a strong upside move. This momentum can propel Infosys share to higher levels of Rs 1680 in the coming trading sessions.
Manoj Dalmia, founder and director, Proficient Equities, said, “Infosys has seen some buying in the last few weeks. The price may hold at the current levels for a week or two and move towards the peak of Rs 1939. Investors can buy this fundamentally strong stock from a long term perspective.
IT stock can go up to Rs 4,000 in the long term.
Ravi Singh, Vice President and Head of Research, SHARE India, said, “TCS is India’s leading IT services company with strong organic revenue growth and one of the best margins in the industry. The company is almost debt free. Its ROE is good and the company also pays a dividend of 56.35 per cent. Even on the technical setup, TCS share price may see more strength to pull the stock towards Rs 3550 levels in the near term.
Manoj Dalmia, founder and director, Proficient Equities, said, “There has been some buying in TCS recently. We can expect some consolidation in the range of Rs 3000-3300. This fundamentally strong stock can be bought at these levels with a target of Rs 4000 from a long term perspective.