Indian IT stocks TCS, Wipro, Mphasis and peers extend gains after rupee makes new low of 90.42

Indian IT companies, led by TCS, Persistent Systems and Coforge are extending their gains after the currency made another record low of 90.42 against the US Dollar on Thursday, December 4.

Shares of TCS are the top gainers on the Nifty IT index, with gains of nearly 2.5%, while Wipro, Mphasis and Tech Mahindra have also seen gains between 2% and 3% in early Thursday trading.

For the week so far, shares of Wipro, Mphasis, TCS, Tech Mahindra and LTIMindtree are up between 2% to 2.5% each, while those of Infosys, HCLTech and Coforge have also gained between 1% to 2%.

Weakness in the currency is generally a positive for the margins of these IT companies, as majority of their topline comes from the North American market.

In recent updates, analysts tracking the sector have highlighted that the focus of AI will shift from building infrastructure to software, applications and data engineering. This step, according to the analysts, will unlock more AI revenue over the next 12-18 months.

A consensus estimates of analysts expects mid-single-digit earnings growth expectations for the full year. This, along with a 4% to 5% dividend yield, makes it attractive to look at these stocks, a handful of analysts wrote in their recent reports.

Shares of TCS are the top gainers on the Nifty IT index, currently up 2.6%, along with Wipro, which is up a similar quantum. Shares of Mphasis and Tech Mahindra are also trading with gains of over 2% each. All stocks on the Nifty IT index are trading with gains. The Nifty IT index is currently 18% off its all-time high levels, which the index had surged to in December last year.

(With Inputs From Reema Tendulkar)