Nifty IT Up 2%, Showing Reversal; 3 IT Stocks Down Over 30% From 52-Week Highs!

  • Stock Market Analysis

IT stocks are the star performers for the day. Most of the IT stocks are outperforming the broader markets with their massive intraday rallies. While the Nifty 50 index is up 0.84% to 16,767, the Nifty IT index soared 2.16% to 30,436 in the morning trade. Some of the biggest contributors to the Nifty IT index rally are - Coforge Limited (NS: COFO ) (3.3% up), HCL Technologies (NS: HCLT ) (2.8% up), Infosys (NS: INFY ) Limited (2.47% up), etc. 

The entire IT pack have had a rough time since the beginning of the year as the sector has been going through many headwinds such as increasing interest rates across the world which has questioned the sky-high valuations of this high-growth tech space. Supply-side concerns are also there owing to the increased cost of acquisition and retention of good talent and a high attrition rate. 

However, the recent fall in IT stocks has probably gone over the top, throwing these IT stocks to a lucrative valuation now. This is probably the reason why IT stocks are gaining investors’ attention for the last few session. Despite a decent bounce from the lower levels, some IT stocks are still trading at a deep discount of over 30%, when compared to their respective 52-week highs. Let us have a look at three such stocks. 

Wipro Limited

Wipro Ltd (NS: WIPR ) is one of the biggest IT services companies in the country with a market capitalization of INR 2,59,115 crores. The Wipro share price has fallen significantly from its 52-week high of INR 739.85 to the last traded price of INR 486.7, translating into a plunge of 34.2%.

The fall has also bumped the dividend yield of the stock to 1.27%, compared to the sector’s yield of 1.81%. However, the stock’s P/E ratio of 21.19 is noticeably lower than the industry’s P/E ratio of 26.76, quoting it to be undervalued at the current levels. In FY22, the consolidated net income of the company witnessed a jump of 15.95% to INR 12,229.6 crores, compared to INR 10,796.4 crores in FY21.

Coforge Limited

Coforge (formerly, NIIT Technologies) is a mid-cap Indian company that is engaged in providing IT consulting services, having a market capitalization of INR 23,394 crores. The Coforge share price tumbled over 36.2% from the 52-week high of INR 6,135 to the current market price of INR 3,914. 

The firm has also performed well in FY22, clocking a 45.24% growth in net profit to INR 661.7 crores, compared to INR 455.6 crores in the previous year. Although the company has performed much better than the majority of its peers, it is trading at a valuation of 35.36 P/E ratio, compared to the industry’s P/E of 26.76, making it somewhat expensive.

Mindtree Limited

The last IT stock on our list which is still down over 30% from its 52-week high is MindTree Ltd (NS: MINT ) which provides software consulting and implementation services. The company is INR 50,547 crores big and the stock is almost 2.5 times more volatile than the Nifty 50. The Mindtree share price is down over 37.7% from the 52-week high of INR 5,060 to the last traded price of INR 3,144.5.

The company’s consolidated net profit grew 48.84% to INR 1,652.9 crores in FY22, primarily on the back of a noticeable increase of 33.41% in revenue to INR 10,832.6. The stock is trading at a dividend yield of 0.88%, while the P/E ratio stands at 30.53, again a bit higher than the sector’s average.  

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  • Mr Mokhtar @Mr Mokhtar
    thanks
    Like 1
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      You're welcome Mokhtar.
      Like 0
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  • samaresh LAYEK @samaresh LAYEK
    Thank you sir
    Like 1
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      You're welcome.
      Like 0
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  • samaresh LAYEK @samaresh LAYEK
    Thank you sir
    Like 0

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