On these two triggers, the Nifty IT index increases by approximately 3% intraday; among others, Tech Mahindra and HCL Tech increase by up to 4%

The shares of information technology (IT) corporations were in the spotlight on Monday, with the Nifty IT index rising close to 3% on the National Stock Exchange (NSE) in intra-day trade, taking cues from good third-quarter Accenture earnings.

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The shares of information technology (IT) corporations were in the spotlight on Monday, with the Nifty IT index rising close to 3% on the National Stock Exchange (NSE) in intra-day trade, taking cues from good third-quarter Accenture earnings.

Additionally, the sharp Friday increase of 3% in the technology-heavy Nasdaq Composite index may have contributed to the buying in the IT sector.

The Nifty IT index and Nifty Metal were the leading gainers at roughly 11:54 AM, each index gaining close to 2%, compared to the Nifty50 index’s gain of about 1%. Compared to a 7% decrease in the Nifty50 index through Friday, the Nifty IT index has fallen 24% in the last three months.

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On the NSE intraday, Tech Mahindra, HCL Technologies, Mphasis, Coforge, Larsen & Toubro Infotech, Mindtree, and Infosys all saw gains of between 2% and 4%. While intraday gains for L&T Technology Services, Wipro, and Tata Consultancy Services (TCS) ranged from 1% to 2%.

According to international brokerage firm Nomura, the demand prognosis for Indian IT remains positive and is notably supported by demand for transformative services and cloud adoption. Although the demand outlook for FY23F is positive, it had been stated that one should anticipate a quicker slowdown than what was anticipated for FY24F.

Accenture’s Q3FY22 results, which showed revenue of US $16.16 billion, up over 27% YoY in constant currency, and an EBIT margin of 16.1%, up 10 basis points YoY, demonstrate strong near-term demand. According to Nomura, EPS at $2.79 US was up 16% YoY.

According to Accenture’s analysis, the demand climate is still favourable and the sector’s growth has not yet been negatively impacted by the weakening macro environment. Accenture’s margin guidance suggests a consistent margin performance in FY23, according to Motilal Oswal Financial Services, even though supply-side challenges remain a cause for worry due to elevated attrition and decreased workforce addition.

“We maintain our positive stance on the sector as we expect sustained growth with stable margin. Infosys, HCL Technologies, and TCS remain our preferred picks within the Tier I IT space,” the brokerage firm said.