Frontline IT firm stocks gain on new deals, better than expected Q1

Frontline IT firm stocks gain on new deals, better than expected Q1
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15 Jul, 2020

A day after Wipro reported a 0.1% growth in net profits at Rs 2,390 crore for the quarter ended June 2020, the Bengaluru headquartered IT services firm’s shares gained 16% on the Bombay Stock Exchange.

On earnings day, the company also announced plans to acquire a Brazilian peer for $22.4 million, which will help the company boost its topline while gaining market share in the Latin American market.

Broadly, benchmark index BSE rallied over 2% in the early hours of trading, over hopes of Covid-19 vaccines being tested at multiple pharma and biotech firms, globally. Out of the BSE-30, only four firms traded in the red.

The fear of an economic slowdown also saw no effect in another Bengaluru-based IT services firm, Infosys. The stock was up by about 8% during the early hours of trading. Infosys on Tuesday signed a large digital transformation deal with US-based investment management and pension scheme player Vanguard, a day ahead of its Q1 results.

Read: Covid-19 induced tech boost to help IT firms power through crisis: Motilal

Mid-tier information technology services firm Mindtree reported a 130% increase in quarterly profits on the back of what the company described as a healthy order book despite headwinds caused by the Covid-19 pandemic. The company’s stock traded at Rs 998.9 at 11:11 hrs, up by 2%.

Shares of Mumbai based information technology (IT) services provider Tata Consultancy Services (TCS), despite reporting worse than expected earnings for Q1, were up nearly 3% on an overall sentiment on the back of big deals. The company had signed a total of $6.9 billion TCV, its highest ever, in Q1, FY 21.

Among other IT stocks that saw a jump were Tech Mahindra, trading at Rs 624, an increase of over 4% at 11:35 hrs. The shares of HCL, which is scheduled to report its Q1 earnings on Friday, was also up by nearly 5% at Rs 619.