Nifty IT clocks new lifetime high, rises over 1,000 pts so far today; All stocks rally; Except TCS, Oracle, others hit new 52-week highs

The performance in domestic IT stocks comes after strong revenue guidance announced by Accenture for the financial year FY22.

Sep 24, 2021 01:09 IST India Infoline News Service

Market Going Up
IT company stocks were the top picks of a record level Friday's market session. Nifty IT has risen by more than 1,000 points so far today. The index has clocked a new historic high of 37,823.15. The performance in domestic IT stocks comes after strong revenue guidance announced by Accenture for the financial year FY22.

On Nifty IT, all stocks are trading on a higher note. However, except for index heavyweight TCS and Oracle Financial Services, all other stocks have clocked a new 52-week high.

Stocks that have touched a new high today are - L&T Infotech (Rs6,498.50 per piece), Mphasis (Rs3,534.60 per piece), HCL Tech (Rs1,377.75 per piece), Mindtree (Rs4,733.90 per piece), Infosys (Rs1,788 per piece), Wipro (Rs699.15 per piece), Coforge (Rs5,832.95 per piece) and Tech Mahindra (Rs1,547.85 per piece).

At around 1 pm, Nifty IT was trading at 37,366.90 soaring by 550 points or 1.49%. On the index, L&T Infotech was the top gainer surging 4% followed by Mphasis and HCL Tech jumping more than 3% each.

Mindtree and Infosys zoomed by 1.7% and 1.6%. While Wipro advanced by over 1%. Oracle Financial gained 0.8%, while Coforge was up 0.5% and TCS jumped 0.3%. Tech Mahindra was marginally higher.

For the full fiscal year FY21, Accenture posted strong revenues of $50.5 billion, an increase of 14% in U.S. dollars and 11% in local currency compared with fiscal 2020. Diluted earnings per share increased 16% to $9.16 from $7.89 last year, including gains on an investment of $0.36 and $0.43, respectively. Excluding these gains, adjusted diluted EPS for fiscal 2021 were $8.80, an 18% increase from $7.46 in fiscal 2020.

For FY22, Accenture's business outlook for the fiscal year assumes that the foreign exchange impact on its results in U.S. dollars will be approximately negative 0.5% compared with fiscal 2021. For fiscal 2022, the company expects revenue growth to be in the range of 12% to 15% in local currency. Accenture expects the operating margin for the full fiscal year to be in the range of 15.2% to 15.4%, an expansion of 10 to 30 basis points from fiscal 2021.

Also, for the FY22, Accenture expects operating cash flow to be in the range of $8.2 billion to $8.7 billion; property and equipment additions to be $700 million, and free cash flow to be in the range of $7.5 billion to $8.0 billion.

Moreover, Indian IT companies are best placed amid the Covid-19 pandemic. While addressing the National Management Convention of the All India Management Association (AIMA), the Reserve Bank of India (RBI) governor Shaktikanta Das that information technology (IT) services and information technology-enabled services (ITES) backed by entrepreneurial capabilities and innovative solutions have emerged as a key strength of the Indian economy over the years.

Das said that there is a growing league of Unicorns in India reflecting its potential for technology-led growth. The country has added several unicorns over the last year to become the third-largest startup ecosystem in the world. Underpenetrated Indian markets and a large IT talent pool provide an unprecedented growth opportunity for new-age firms.

Further, Das added that the COVID pandemic has provided a new impetus to technology-driven companies such as fintech, edtech and health tech which are likely to see increased funding activity in the coming years.

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