Select equities, according to experts, could be purchased on dips, but there are better possibilities, such as manufacturing, capex-led enterprises, and banking.
Despite the current recession in the United States and Europe, the country’s information technology (IT) majors have lagged the benchmark equity indices over the last two years. According to data, four companies in the Nifty IT have drained investors’ wealth since June 2021.
Wipro was the index’s biggest loss, falling 30.11 percent. The company’s shares fell to Rs 382.60 on June 27, 2023, from Rs 547.40 on June 28, 2021.
- During that time, the NSE IT index fell by 0.92 percent, while the NSE Nifty index increased by 19 percent.
- The index’s other notable losers were Infosys (down 18.62%), Mphasis (down 10.25%), and Tata Consultancy Services (down 4.18%).
- “In the last 12-15 months, earnings estimates for Indian IT companies have been reduced, and premium valuations have normalised to long-term average valuation multiples.”
- However, given to global concerns and further downward revisions in consensus profit projections, the underperformance could persist in the near future,” Dua noted.
On the other hand, Persistent Systems shares surged the most in the Nifty IT index. The stock rose 81% to Rs 4,891.90 a share on June 27, 2023, from Rs 2,702.25 on June 28, 2021.
“IT is looking reasonable; however, mid-cap IT is looking even better,” said Sandeep Raina, Head of Research at Nuvama Professional Clients Group. However, one must recognise that there are better possibilities, such as manufacturing, capex-led enterprises, and banking.”
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