IT firms shine in an otherwise dismal market: Is that the place to be

Mumbai: While most sectoral indices on BSE have logged losses for the year so far, software services companies seem to be providing some solace to jittery investors, because of optimism on the back of strong demand outlook.

On a year to date basis, while Sensex has shed 0.48 per cent, BSE IT index has given 6.82 per cent return for the same period. BSE IT and BSE Teck indices are the only ones to log positive gains so far in 2019.

Tech Mahindra, which last week approved buyback of up to 2.06 crore shares, or 2.10 per cent stake, for up to Rs 1,956 crore at Rs 950 per share has been the top performer in the IT pack. It has gained 13.77 per cent so far this year, adding to the 43.12 per cent gain it logged in 2018.

WiproNSE -1.98 % and Tanla Solutions come next in terms of year-to-date gains, with 13.40 per cent and 12.60 per cent rise, respectively. Sectoral leader Tata Consultancy Services is up 1 per cent for th ..

WiproNSE -1.98 % and Tanla Solutions come next in terms of year-to-date gains, with 13.40 per cent and 12.60 per cent rise, respectively. Sectoral leader Tata Consultancy Services is up 1 per cent for the same period.

Earlier this month, InfosysNSE -0.95 %, up 11.14% since the start of the year, had announced a Rs 8,260 crore share buyback. The board of Persistent SystemsNSE 1.82 % also approved a buyback offer of up to Rs 225 crore in January this year.

“The third-quarter numbers were decent for the IT sector, and management commentaries were positive. They have also increased hirings,” said Gaurav Dua, head of research at Sharekhan, which is owned by BNP ParibasNSE 0.70 %.

Brokerages have been upbeat on the prospects of the IT industry after December quarter earnings. In a note dated February 19, HDFC Securities said both revenues and margin were in line with the estimates at an aggregate level for the sector. Among tier-1 IT companie ..