In another choppy session on March 19, indices swing between gains and losses and at the time of writing this copy, Sensex was up by 215 points, while Nifty gained 58 points and topped levels of 14617.
Among Nifty sectoral indices, while FMCG and pharma pack gained the most by over 2 percent and close to 1 percent, respectively. IT pack too traded in the green and was last up by 0.63%, with major contribution coming in from stocks like TCS, Infosys, HCL Tech, Info Edge and Coforge.
The surge in the IT index today comes on the back of robust earnings being reported by IT major Accenture. The company for the FY21 has raised its guidance to 6.5-8.5 percent from the guidance of 4-6 per cent in Q1FY21 owing to digital boom. Also, it has logged an 8% growth for the qtr ending February 2021 at $12 billion. Furthermore, the new deal wins are at a record $16 billion, up 13 percent YoY. The company follows September to August as its financial year.
Amid Covid 19, there has been registered an increase in demand for digital services including cloud that is resulting in strong traction in the industry.
Abhishek Bhandari of Macquarie Capital Securities in an interview with CNBC TV 18 said ""The key message from Accenture result is that the demand tailwinds are very strong for the sector mainly in cloud transformation".
"The sector is still undergoing EPS upgrades both led by revenue as well as margin. A company like Infosys has been constantly upping the revenue guidance mainly aided by robust deal inflows that they have witnessed," he added while speaking about the IT sector.
In the largecap space, his picks are Infosys and HCL, while in the mid-cap IT space, he is bullish on Larsen & Toubro Infotech and Mphasis.
"Our top picks are Infosys and HCL Technologies in the largecap space. In Infosys, our target price is Rs 1,680. We are positive on HCL Tech because we see the software business for them turning around. In the midcaps we like Mphasis and Larsen & Toubro Infotech," he said.