InformationTechnology companies are all set to post their fourth-quarter earnings results starting with TCS Q4 numbers on April 12. In the fourth quarter of FY24, the IT stocks delivered negative returns and the Nifty IT Index was down 2.2 % in Q4. However, some stocks saw positive returns on an individual basis-
Performance of IT stocks
Shares of the Tata Group’s Tata Consultancy Services gained 1.7% in the Q4 of FY24. The stock has surged 12.78% in the last six months and 23.4% in the last one year.
Similarly, shares of HCL Technologies advanced 4.03% in Q4 FY24. The stock rose 25.3% in the last six months and 41% in the past one year.
Meanwhile, Infosys shares were up 3.4% in the fourth quarter of FY24. The stock rose 2.5% in the last six months and above 5% in the last one year.
Wipro’s gains were muted at 0.62% in the Q4 FY24. The stock surged 14.22% in the past six months and 28% in the last one year.
However, there were some laggards too…LTIMindtree dipped over 21% in Q4 FY24. The stock pulled back more than 4% in the last six months but rose over 2% in the last one year.
Similarly, Tech Mahindra also underperformed Nifty IT. Tech Mahindra lost almost 4% in the same period mentioned above. However, the stock rose 4.7% in the last six months and 13% in the past one year.
Nifty IT underperformed Nifty 50. The benchmark index inched higher and gained 2.7% in the 4Q FY24.
“We expect muted constant currency (CC) revenue growth for Tier-1 IT service companies and relatively healthy revenue growth for tier-2 companies owing to weak macros leading to lower discretionary spends and lower revenue conversion. We expect q-o-q constant currency (CC) revenue growth of -1.3% – 1.6% for tier-1 Indian IT service companies and -0.6%-4.6% q-o-q revenue growth in CC terms for tier-2 IT companies. Cross-currency impact is expected to be marginal for most players. Among Tier-1 IT companies, TCS is expected to lead revenue growth while LTTS/Persistent / and Coforge among Tier-2 companies are expected to report strong sequential revenue growth,” said Sharekhan by BNP Paribas in a research report.
“We continue to believe that Tier-II companies have the building blocks to sustain the growth momentum, the entry valuations are unfavourable. Tier-I valuations are favourable but earnings upgrade is limited. Consequently, we prefer restructuring stories and Tech Mahindra continues to be our preferred stock pick, added InCred Equities in its research report.
