IT shares extend rally; TCS, Infosys, HCL Tech, Tech Mahindra hit new highs

IT shares extend rally; TCS, Infosys, HCL Tech, Tech Mahindra hit new highs

Shares of information technology (IT) companies continued their northward journey at the bourses, with the Nifty IT and the S&P BSE IT indices hitting their respective fresh record highs on Wednesday amid hopes of more large deal wins, which would further help accelerate the sector's growth momentum.

Tata Consultancy Services (TCS), Infosys, HCL Technologies, Tech Mahindra, Larsen & Toubro (L&T) Infotech and MphasiS from the Nifty IT index hit their respective fresh record highs. Birlasoft and Persistent Systems from the non-index stocks, too, hit new highs today.

At 09:51 am, Nifty IT index and the S&P BSE IT index, were up 1.3 and 1.5 per cent, respectively. In comparison, the benchmark indices, Nifty50 and the S&P BSE Sensex were up 0.4 each.

Among individual stocks, Wipro surged nearly 4 per cent to Rs 377, after the company announced a significant strategic digital and IT partnership deal with METRO AG, the leading global wholesale company that is redefining the food service distribution industry. The stock was trading close to its record high of Rs 382 touched on October 13, 2020.

The estimated deal value for the duration of the first 5 years is approximately $700 million. With the intention to extend up to 4 additional years, it can be a potential spend of up to $1 billion, Wipro said in a press release.

Infosys was up 2 per cent at Rs 1,249, up 6 per cent in the past two trading days after the company said it has won a multi-year deal from German automotive major Daimler to drive hybrid-cloud powered innovation and IT infrastructure transformation. The company has not shared deal specifics.

After the receipt of all regulatory approvals, Daimler AG will transform its IT operating model and infrastructure landscape across workplace services, service desk, data center, networks and SAP Basis together with Infosys, the company said in a press release.

This presents an opportunity for Indian IT companies to increase their penetration in Continental Europe, which has historically lagged US in outsourcing adoption, Motilal Oswal Securities said in sector update. Despite rich valuations, we remain positive on the sector alluding to the multi-year growth cycle awaiting the sector, it said. The large deal wins for both Infosys and Wipro reinforces positive stance on the IT Services industry, it said.