IT stocks in action; Ambareesh Baliga suggests buying HCL Tech, Infosys at current levels

IT stocks are seen buzzing in trade today, with Nifty IT index up 0.6 per cent at the last count. Of the 10 stocks constituting the index, 9 traded with gains, with LTIMindtree and Tech Mahindra leading the gains, while Infosys was the only loser.

Ambareesh Baliga, an independent market analyst, is overall positive on the IT pack and suggested buying Infosys and HCL Technologies at the current levels. He added that the expansion of the deal with Germany's apoBank will be positive for HCL Tech. Noida-based IT services company on Tuesday said it has expanded its partnership with Germany's largest cooperative primary bank Deutsche Apotheker- und Ärztebank eG (apoBank). The estimated contract value of the deal is USD 278 million (around Rs 2,300 crore) over a duration of 7.5 years, according to a regulatory filing.

Furthermore, HCL Tech and Olympus Corporation (Olympus), a global MedTech company, have expanded their strategic partnership to enable advanced and affordable healthcare for patients through cutting-edge engineering technologies.

Over the next six to eight months, Baliga expects HCL Tech stock to touch Rs 1,650-Rs 1,700 odd levels, implying an upside of nearly 19 per cent from the last close. The sharp upside in the counter is seen as the expert believes that the performance across the space will improve substantially after one or two quarters.

Over the past week, the Nifty IT index has zoomed 4.82 per cent, while on a YTD basis it is still an underperform with a negative return of over 2 per cent.

Echoing a similar view, Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said that the pack offers valuation comfort. Further, he advised investors to focus on fairly valued quality growth stocks.