Tcs and Infosys are the only silver lining as Bulls Eye returns




The Nifty IT remains in the bearish zone – meaning more than 20% off its recent peak – with a majority of constituents except TCS and Infosys far from their highs. Experts say it may be a bit longer before we can expect a return to space.

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A strong global rally on Dalal Street over the past few weeks has brought the Nifty50 back within four percent of its all-time high of October 2021, but there is still a lot of ground to cover before participating in the market rally. Experts are divided on whether the pain in India’s IT basket has peaked or not.

The Nifty IT – whose 10 member stocks include TCS, Infosys, Wipro, Tech Mahindra and HCL Tech – has fallen 23.5% so far in 2022, sharply underperforming the benchmark Nifty50 index.

The weakness in the IT basket on the street comes at a time when major players are seeing robust revenue growth, but high levels of attrition – leading to high labor costs – continue to eat away at their margins.

The IT index – which also counts L&T Tech, L&T Infotech, Mphasis, Coforge and Mindtree among its constituents – remains deep in bearish territory. A stock or index is said to be in the bearish zone when it is at least 20% below its high.

Andrew Holland, CEO of Avendus Alternate Strategies, believes that there are not enough tailwinds for IT companies.

“I just don’t think there’s enough tailwind for the sector given that it’s just tracking what’s happening in tech stocks in the US. Unless you have an opinion very firm. I’m not saying any of these actions are bad, but there is a catalyst as global economies enter recession,” he told CNBC-TV18.


“If you have a very positive view that tech stocks in the US are going to start to do well, which I don’t think, then I think this rally in IT stocks will likely fade again when markets will correct themselves,” he said.

Here are some highlights from the April to June newsletters of India’s top software exporters:




CLSA expects attrition in the IT space to be optically moderate by the quarter ending December 2022. It also expects a pause in the downgrade cycle in the near term.

The brokerage has TCS, Infosys and HCL Technologies as preferred picks in the industry.

Among the optimists who believe the IT package may soon participate in the overall market recovery is Chirag Kachhadiya, chief IT analyst at Ashika Group.

“The Indian IT space is actually participating since the return of FII (net purchase of Indian stocks) over the last month and this time it will be a specific stock rather than the whole industry,” he said. he declares.

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