CLSA said the commentary of IT companies is positive on improving demand environment in BFS & telecom segments.
The Nifty Information Technology index gained around 100 points in morning on Monday after global brokerage house CLSA said Indian IT hiring grew for the 8th successive month. TCS gained 1.7 percent and Infosys 1.2 percent whereas HCL Technologies declined 1.5 percent in morning.
IT hiring increased by 8 percent in November 2018.
The research house said IT outperformed the 50-share NSE Nifty index after 2 months and outperformed on a-12 month basis too.
In last one year, the Nifty IT was the biggest gainer among all indices, rising 23.5 percent while Nifty50 advanced 2.5 percent.
The rally in IT stocks attributed to strong US economy, recovery in earnings, overall rupee depreciation (more than 9 percent fall against US dollar to trade around 70), improvement in BFSI segment etc.
CLSA said the commentary of IT companies is positive on improving demand environment in BFS & telecom segments.
It feels valuations are not cheap for TCS & Infosys which are trading above 3-year average PEs. TCS is the biggest gainer among IT stocks, rising 43 percent followed by Mindtree (up 41 percent), Tech Mahindra (41 percent), KPIT Technologies (30 percent), Infosys (24 percent) and HCL Technologies (7.6 percent).
HCL Technologies & Infosys offer the most value & TCS offers momentum among IT stocks, CLSA said.
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