Information Technology (IT) stocks advanced as much as 7 per cent in trade on Friday. Nifty IT index gained 1.2 per cent in a weak market. The buying on the counter came after the Indian rupee hit fresh lows in the early trade.
At 10:01 AM, individually, Oracle Financial Services Software was up over 5 per cent, TCS gained 0.91 per cent, HCLTech advanced 0.58 per cent, and Wipro was up 0.11 per cent.
“The fall in the value of the rupee against the US dollar has a positive impact on the IT space,” said G Chokkalingam, founder, Equinomics Research.
Usually, when the rupee weakens, IT companies typically benefit. This is because a significant portion of their revenues comes from overseas clients, primarily in US dollars. A weaker rupee increases the value of their dollar-denominated earnings when converted back to INR, boosting profitability.
In the morning deals, the domestic currency hit a new low at 96.16 against the US dollar. On Wednesday too, the rupee settled at a new closing low of 93.98 per dollar against the previous close of 93.87.
DSP Mutual Fund, in its recent report, noted that Indian IT companies have been among the most neglected segments in this market cycle. The key reasons are weaker growth and limited visibility, along with the absence of the “AI froth” that has boosted global tech valuations.
It added: This is not the first time such skepticism has emerged. A similar phase played out in 2016–2017, when clients shifted from traditional outsourcing to digital and cloud. Investors worried about disruption, and margins and growth did weaken. But Indian IT firms adopted these technologies, tweaked delivery models, and returned to a steadier growth path.
Even after the recent de-rating, the sector still shows solid return on equities (ROEs), disciplined capital allocation, and reasonable valuations, making it relatively attractive versus the broader market. Some further price fall can make this sector attractive on an absolute basis. Till such times, a systematic investing approach seems logical.
Meanwhile, Indian stock markets were trading lower amid uncertainty around the West Asia conflict resolution.
US President Donald Trump extended his Friday deadline to attack Iran’s energy infrastructure by 10 days to April 6 to allow more time for negotiations.
The extension was at the request of the government of the Islamic Republic, Trump said, and it was granted in exchange for 10 oil tankers that passed through the Strait of Hormuz as a “present” from Tehran.
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