The market is showing great interest on IT stocks. Speaking on the same Kushal Gupta, Senior Research Analyst at Zee Business said that all market analysts are currently bullish over IT space no matter of what category the IT company is.

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The midcap IT companies have shown lots of action over a period of 1-month and if one observes last 7-10 days, then lots of action can be seen coming in major IT space companies, the research analyst said.

 

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Informing about the reason behind the action, Kushal said that this is because of the demand environment for digital transformation which has emerged after the coronavirus pandemic.

He said that this demand environment is being seen as playing out a long term cycle. Infact analysts are of the opinion that for the next 4-5 years this demand environment is going to be very strong, he added.

 

The research analyst said that by FY24 it is being assumed that the revenue growth will be in high double digits. The pipeline deals and other contracts are being won, which is building a positive environment. He said that several companies are also showing strong FY22 guidance.

Compared to Nasdaq, Nifty IT index is showing around 20 percent discount and hence is making positive space, he said.

Kushal added that IT companies are making entries into new geographies and new verticals as they are seeing getting digital contracts across industries.

He said that Morgan Stanley has said in a note that Mindtree and Mphasis Ltd are the two 2 stocks whose revenue growth are being liked and are very bullish for the future.

KPIT Tech has already shown a strong growth of 25-26 percent, the research analyst said. He said that big companies like TCS and HCL Tech has also shown a growth of more than 10 percent. He concluded by saying that across categories IT space can be seen outperforming.