IT stocks surge as Wipro, HCLTech exceed Q3 expectations

IT stocks surge: Information technology stocks soared by 4 per cent buoyed by stellar third-quarter performances from Wipro and HCL Technologies, signifying a positive outlook for demand stability in the sector.

Wipro's shares witnessed a remarkable surge of 13.7 per cent, hitting their highest level since April 2022 and set for their best day since July 2020. Meanwhile, HCL Technologies saw a robust 5 per cent increase, hitting a record high.

The Nifty IT index, consisting of 10 members, surged by 4 per cent to nearly two-year high, propelling the benchmark Nifty 50 index to fresh record peak. The positive momentum comes after a challenging year for Indian IT companies, as clients favoured cost-oriented deals over growth-oriented ones.

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According to Wipro CEO Thierry Delaporte, there is now "some stabilization from revenue deceleration." Wipro is observing early indications of growth in its consulting vertical, driven by double-digit sequential growth in order bookings at Capco, a firm acquired by Wipro in 2021.

The positive performance in consulting has raised hopes for growth normalization in fiscal 2025, as noted by analysts at Emkay Global. The sector's outlook appears optimistic, with clients showing an inclination towards growth-oriented deals.

Infosys, India's second-largest IT services company, witnessed an 8 per cent rally on Friday after surprising investors with robust earnings for the December quarter. This performance further contributes to the positive sentiment in the IT sector.

The overall surge in IT stocks reflects investor confidence in the sector's resilience and potential for growth, underlining a shift from the challenges faced in the previous year. The positive results from key players such as Wipro, HCL Technologies, and Infosys signal a promising trend for the IT industry.