Most technology stocks run into rough weather as rupee climbs

Infosys stands out within the IT pack, which trades below long-term valuation.

| Nov 27, 2018, 10.49 AM IST

Steep volatility and rupee appreciation have led to a correction in the IT stocks, Madhu Babu said.

The Nifty IT Index has been the best sectoral performer so far this year, gaining 17 per cent, largely on the back of the rupee’s depreciation against the greenback.

However, it saw some reversal last week with technology stocks giving up some of their gains as the rupee touched an 11-week high. Brent’s 30 per cent correction from its recent peak has set a stronger tone for the domestic currency, said Madhu Babu, analyst at Prabhudas Lilladher. Steep volatility and rupee appreciation have led to a correction in the IT stocks, he said.

PRICE PERFORMANCE

Valuation Picture
Infosys is the only technology company among the five which trades below its 10-year historical average. Madhu Babu believes stocks have already de-rated significantly and most Tier-I IT stocks are at reasonable valuations with the exception of TCS.

VALUATION

Analyst View

Infosys stands out within the IT pack, which trades below long-term valuation. Analysts expect highest return from the stock over the coming 12 months.

ANALYST RECOMMENDATION