Nifty IT slips nearly 5% in a bearish market; Tech M, Infosys fall up to 6%

In the past eight days, the Nifty IT index has slipped 10 per cent, as compared to 4 per cent decline in the Nifty 50 index

TCS, wipro, infosys
SI Reporter Mumbai
2 min read Last Updated : Aug 29 2022 | 10:26 AM IST
Shares of information technology (IT) companies fell up to 6 per cent on the National Stock Exchange (NSE) in Monday's intra-day trade after the US Federal Reserve Chairman Jerome Powell said that higher inflation is likely to inflict pain across households and businesses.

 At 09:23 am, the Nifty IT index was the top loser among sectoral indices, and was down 4.5 per cent, as compared to 2 per cent decline in Nifty 50. Meanwhile, in the past eight days, the index has slipped 10 per cent, as compared to 4 per cent decline in the Nifty 50 index.

Shares of Tech Mahindra, Infosys, Tata Consultancy Services (TCS), Mindtree, Larsen & Toubro Infotech, Coforge, HCL Technologies, Wipro and L&T Technology Services fell up to 6 per cent intoday's intra-day trade.

The April-June quarter (Q1FY23) saw execution pick up for IT companies as it is a first full quarter of execution (barring company specific seasonality) after full/partial impact of furlough in Q3 and Q4. Operating margins, however, were impacted due to wage hikes rolled out in the quarter for few companies, while for others, supply side challenges, increase in sub-contractor expenses, travel & visa related expenses acted as major headwinds.

Despite minor pain in select verticals of IT companies, analysts at ICICI Securities remain optimistic of no downward revision in revenue growth guidance for FY23.

"The demand environment continues to be strong, which reflects in healthy order book growth. However, companies did mention about weakness in a few pockets as far as tech spending is concerned due to some impact of macro headwinds. The weakness largely pertains to BFSI and retail verticals. It is also heartening to see no downward revision in revenue growth guidance in FY23 by any of the companies," the brokerage firm said.

On the contrary, a media report by the Economic Times stated that the revenue of the IT service providers may be impacted by up to 33 per cent due to a fall in the growth rate of three platforms - Amazon Web Services, Microsoft Azure and Google Cloud. In the first half of 2022, the three platforms have reported a 7 per cent fall in incremental revenues. CLICK HERE FOR FULL REPORT


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Topics :Buzzing stocksNifty IT stocksIT stocksHCL tech stockInfosys Tech MahindraTCSstocks to watch

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