IT stocks extended gains for the second consecutive session, with Coforge and Persistent Systems leading the rally on value buying amid a weaker rupee. The positive momentum lifted the Nifty IT index nearly 2% after the opening bell, as the benchmark Sensex and Nifty 50 snapped a seven-day losing streak. Shares of Coforge rose over 3% to ₹1,881.15 on the BSE, while Persistent Systems climbed over 2% to ₹5,660. Heavyweights including Infosys, Wipro, TCS and Tech Mahindra also traded higher, with Infosys gaining over a percent to ₹1,132.15 on the BSE. However, BSE shares fell over 3% from day's high, indicating broader market volatility despite the IT sector's strong performance. As per Vinod Nair, Head of Research, Geojit Investments Ltd, IT stocks outperformed on value buying and support from a weaker rupee, reflecting weakness across Asian markets.
According to Teji Mandi and Hem Securities Ltd. experts, Coforge Ltd. is currently trading at ₹1,881.15 and receives a hold recommendation. The stock has demonstrated a breakout above its two-week consolidation period, indicating positive momentum in the IT sector. Market experts maintain a positive outlook on the company and the broader IT sector, with an upside target of ₹1,980 and support level placed at ₹1,770. The technical analysis suggests the uptrend is likely to continue, making it suitable for holding rather than selling at current levels. Despite recent volatility, shares of Coforge have gained nearly 3% in the last three months, though they have declined over 9% in the year so far. In the longer-term, shares of Coforge have delivered over 19% returns in the last three years and nearly 40% in the last five years.
As reported by market experts, Persistent Systems Ltd. is trading at ₹5,660 and continues to demonstrate strong performance. The stock has been a key driver of the IT sector's recent rally, benefiting from value buying amid a weaker rupee. The positive momentum reflects the company's solid fundamentals and technical positioning in the current market environment. Market experts suggest maintaining a hold position given the long-term positive outlook, with the stock's performance reflecting broader sector strength.
According to Vinod Nair, Head of Research, Geojit Investments Ltd, IT stocks outperformed on value buying and support from a weaker rupee, reflecting weakness across Asian markets. The Q1 earnings for Indian IT majors was in line with muted expectations for most largecaps, with the aggregate growth trajectory for the top nine IT companies remaining stuck in low gear. Nifty IT has now underperformed Nifty 50 by ~11% in the year to date, despite the sharp bounce from May lows. The index now trades at ~18x 1-year forward earnings, expensive in the context of AI deflation. However, Indian IT stocks continue to outperform global tech peers, with the sector benefiting from favorable currency dynamics and selective buying opportunities.
Despite current challenges, IT stocks have delivered over 19% returns in the last three years and nearly 40% in the last five years for most companies. As per market experts, the sector's long-term fundamentals remain strong, with Coforge having delivered over 19% returns in the last three years and over 39% in the last five years. While shares of Infosys have declined over 6% in the last six months and over 5% in the last one year, the company's long-term track record remains positive. The current rally reflects selective value buying opportunities amid global tech volatility, with the weaker rupee providing additional support for domestic IT companies.
