IT stocks defy market slump, emerge as top sectoral gainer; OFSS, Wipro, TCS and Persistent lead the charge

IT stocks are in focus on Friday, extending their rally for the third consecutive session despite broader market weakness. The NIFTY IT index is trading 0.3% higher at 29,727, outperforming the NIFTY50 index, which is trading 1.6% lower during the session.

The sector is buzzing in trade amid multiple stock-specific announcements that have lifted overall sentiments.

Here are key developments driving the momentum:

The agreed consideration for the contract is estimated to be at $100 million (₹940 crore). The development serves as a significant sentiment booster, countering the gloomy outlook for the traditional IT services, facing the rise of new generative AI models.

Shares of India’s one of the largest IT and services technology companies, Infosys, were buzzing in trade on Friday after the company announced the acquisition of Optimum Healthcare IT. It is recognised as a Best in KLAS healthcare digital transformation and consulting firm, recognised for helping provider organisations drive large-scale transformation.

The shares are oscillating between gains and losses at ₹1,279 apiece on the NSE.

Apart from Infosys and OFSS, other IT leaders, such as Tata Consultancy Services and Wipro, were also among the top gainers in the NIFTY IT index with gains of up to 1.6% on the NSE.

Experts believe the current consolidation in IT stocks near the 52-week low level is a sign of bottoming out after a sharp correction from the record high levels.

The IT stocks currently trade near their long-term average valuations, attracting value investors. The NIFTY IT index’s valuation stood at a 20x price-to-earnings ratio, below its long-term median valuation of 22x.