Shares of Indian software giants started the new year on a roaring note after higher-than-expected sales last quarter surprised investors and helped burnish the outlook for the sector. Led by industry bellwether Tata Consultancy Services Ltd. and Infosys Ltd., the four key software companies, have added about $22 billion in market value in just two trading sessions since Thursday, when the earnings season kicked off. A potential revenue rebound and easing global macroeconomic worries have boosted sentiment.
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Shares of Wipro Ltd. rallied as much as 14% on Monday, their biggest intraday gain since July 2020 before paring gains, as the surprise revenue beat triggered rating upgrades from some brokerages. HCL Technologies Ltd. surged to a new all-time high, boosted by its forecast for improved revenue growth. “A change in sentiment is being reflected in management commentary,” said Siddarth Bhamre, head of research at Religare Broking Ltd. Companies such as Infosys, which have so far been fairly conservative in their commentary, are now beginning to express optimism, he added.
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While global firms’ discretionary spending on technology projects is yet to show frim signs of a pickup or return to past levels, the companies continue to push ahead with initiatives, in particular the ones aimed at lowering costs and improving efficiencies.
The Indian companies are also looking to promote their capabilities in artificial intelligence as demand for such services picks up. “Almost every discussion with clients involves some element of generative AI,” Infosys CEO Salil Parekh said on an earnings call on Thursday.
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The improving sentiment is also visible in earnings upgrades on big IT companies. At least six brokerages raised their ratings on Infosys since its results last week, while analysts at JPMorgan Chase & Co. upgraded ratings on Wipro’s US as well as India-listed shares. “I don’t think the estimates are going to be downgraded any further,” Phillipcapital analyst Karan Uppal said. He expects the companies’ earnings will start showing growth in the next fiscal year which starts in April.
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Shares of Indian software giants started the new year on a roaring note after higher-than-expected sales last quarter surprised investors and helped burnish the outlook for the sector. Led by industry bellwether Tata Consultancy Services Ltd. and Infosys Ltd., the four key software companies, have added about $22 billion in market value in just two trading sessions since Thursday, when the earnings season kicked off. A potential revenue rebound and easing global macroeconomic worries have boosted sentiment.
Elevate Your Tech Prowess with High-Value Skill Courses
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IIM Lucknow
IIML Executive Programme in FinTech, Banking & Applied Risk Management
Shares of Wipro Ltd. rallied as much as 14% on Monday, their biggest intraday gain since July 2020 before paring gains, as the surprise revenue beat triggered rating upgrades from some brokerages. HCL Technologies Ltd. surged to a new all-time high, boosted by its forecast for improved revenue growth. “A change in sentiment is being reflected in management commentary,” said Siddarth Bhamre, head of research at Religare Broking Ltd. Companies such as Infosys, which have so far been fairly conservative in their commentary, are now beginning to express optimism, he added.
Agencies
While global firms’ discretionary spending on technology projects is yet to show frim signs of a pickup or return to past levels, the companies continue to push ahead with initiatives, in particular the ones aimed at lowering costs and improving efficiencies.
The Indian companies are also looking to promote their capabilities in artificial intelligence as demand for such services picks up. “Almost every discussion with clients involves some element of generative AI,” Infosys CEO Salil Parekh said on an earnings call on Thursday.
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The improving sentiment is also visible in earnings upgrades on big IT companies. At least six brokerages raised their ratings on Infosys since its results last week, while analysts at JPMorgan Chase & Co. upgraded ratings on Wipro’s US as well as India-listed shares. “I don’t think the estimates are going to be downgraded any further,” Phillipcapital analyst Karan Uppal said. He expects the companies’ earnings will start showing growth in the next fiscal year which starts in April.
We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.
Agencies
