The S&P BSE IT index closed with gains of nearly 1 per cent ahead of key results from the top bellwether of the IT industry on Wednesday. TCS, Wipro, and Infosys will come out with their results for the quarter ended December post-market hours on 12 January.

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TCS closed 0.9 per cent higher, Infosys rose 0.2 per cent, and Wipro closed with gains of 0.09 per cent on Tuesday.

On a 1-year basis TCS, Infosys and Wipro rose 20-50 per cent in the last year compared to the 24 per cent upside seen in the Nifty50 in the same period.

Despite the recent rally, analysts prefer Tier-I IT companies for investment purposes as valuations remain reasonable. “We prefer Tier-I players over their Tier-II counterparts, given their relative valuation attractiveness and tendency to narrow down the valuation differential over time,” Motilal Oswal said in a report.

Among Tier I players, the domestic brokerage firm likes Infosys, HCL Technology, and TCS. 

TCS and Infosys are expected to report a PAT growth of 17%, and 13% on a YoY basis for the quarter ended December.

Wipro might see a flat YoY and possibly margin dip as well. Key monitorable in the 3QFY22 commentary will continue to be the medium to long term growth visibility, attrition, and pyramid impact of fresher onboarding, said the note.

We spoke to Ruchit Jain, Lead Research, 5paisa.com on Infosys, TCS, and Wipro are looking at technical charts:

Infosys: 1800 important level to track

The IT space has seen a significant run-up in the last few quarters and Infosys has been leading this uptrend from the large-cap space. Post last quarter results, we witnessed some consolidation in this stock, but the momentum resumed when the broader markets were in a corrective phase.

In the last few sessions, the stock has oscillated within the range of 1,800-1,920.  Although the trend remains positive, the near-term direction could depend on the breakout from the range post its results.

Any move below 1,800 could trigger some profits booking, while a move above 1,920 will lead to a resumption of the broader uptrend.

TCS: Support placed at Rs 3,750

Post the announcement of results in the September quarter, the stock prices corrected from the 3900 to 3400 mark. After consolidating for a while around this range, the stock gradually picked momentum again and reclaimed the levels of 3900 ahead of the results.

The trend for the stock continues to be positive as we can see a 'Higher Top Higher Bottom Structure', while the momentum oscillators continue to hint at a positive momentum.

The immediate support for the stock is placed around Rs 3,750 and only breach of this will then apply brakes to the momentum. On the flipside, 4,000 followed by 4,200 are the levels to be seen on the upside.

Wipro: A breakout above Rs 727 eyed

The stock witnessed a corrective phase in the month of November but has recovered smartly during the month of December and has reclaimed the 700-mark.

However, the stock seems to have lost some of the momentum ahead of the results and is consolidating in a range.

The stock needs to give a breakout above 727 for a resumption of the momentum and 680-685 will be seen as an immediate support range, and any move below this support could attract some profit booking.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)