The Nifty IT index fell 4.12 per cent to 27914.15 points in Monday's trade. So far, the IT index has dropped 41% from a record high of 39,446.70.
Five IT stocks are down more than 40% from their 52-week highs
Among the components of the Nifty IT Index, Coforage (down 4.58%), Mindtree (down 5.67%), L&T Tech (down 4.44%), Mphasis (down 4.32%), and Wipro (down 2.34%), L&T Infotech (down 5.22%), Tech Mahindra (down 5.03%), and TCS (down 4.34%) were the top losers in Monday's trade. Among other losers, are Infosys (down 3.72%), and HCL Tech (down 3.04%).
In 2021, the Nifty IT index increased by 59 per cent, owing to substantial earnings growth for IT companies as a result of digital transformation transactions in the United States and Europe.
Meanwhile, the falling rupee is also not helping the sector. Usually, when the rupee depreciates, IT businesses benefit because it increases their profit margins. Big IT companies get a large portion of their revenue in dollars from US clients.
Further, the IT sector has been battling with high attrition as demand for digital talent continues to outpace supply. The ‘Great Resignation’ was the term coined a few months ago when employees, mainly in the tech and startup sectors, were flooded with offers, joining bonuses, and counteroffers. Industry experts, however, predict that the situation will ease shortly, possibly over the next six months.
According to data released by NSDL, FPIs sold stocks worth over ₹16,000 crore from the sector amid a volatile rupee.
The five stocks listed below have dropped by more than 40% from their 52-week highs.
In Monday's trade, Coforge's share price declined more than 4% to Rs. 3,311. The stock hit a fresh 52-week low of ₹3,301 apiece on the BSE.
The stock's 52-week high and low levels were Rs. 3,301 apiece and Rs. 6,135 apiece, respectively. If today's price is taken into consideration, the stock has so far fallen 45.82% from its 52-week high.
The stock previously touched its 52-week high of Rs. 6,135 on Jan. 04, 2022.
The stock has delivered a negative return of 39.49% so far this year. However, over the past five years, the market price of the stock has zoomed by 502.13 per cent.
The company reported a 56.16 per cent jump in consolidated net profit at ₹207.7 crore for the fourth quarter ended March 31, 2022.
Revenue from operations during the quarter increased to ₹1,742.9 crore from ₹1,281.5 crore in the corresponding quarter of 2020-21.
Coforage has delivered an ROE of 24.21% in the year ending March 2022, outperforming its 5-year average of 19.62%. Further, the company's annual revenue growth of 38.09% outperformed its 3-year CAGR of 20.02%.
L&T Technology Services
Shares of L&T Technology Services closed at Rs. 3,248.30 (down 5.75%) on the BSE in Monday's trade. Considering Monday's closing price, the stock has dipped 44.69% from its 52-week high.
The market capitalization of L&T Tech Services is Rs. 36,412 crores. It has a P/E of 36.58 and an EPS of 90.68.
The stock gained more than 17% in the last one year, compared to the Nifty's 0.23 per cent gain during the same period.
For the fourth quarter ended March 31, 2022, the company reported a 34.7 per cent year-on-year (YoY) increase in net profit of ₹262 crore.
In the corresponding quarter last year, the company posted a net profit of ₹194.5 crore.
Total revenue for the quarter increased 21.9 per cent year on year to ₹1,756.1 crore, up from ₹1,446.6 crore in the previous quarter.
During the quarter, LTTS won a $100 million-plus deal, a $25 million-plus deal, and four other deals with TCV of $10 million-plus. During the quarter, revenue from digital and cutting-edge technologies increased by 57 per cent.
|Company Name||Last Traded Price (Rs)||52 Week high (Rs)||Fall from 52 week high (%)|
|Larsen & Toubro Infotech||4,105.45||7,588.80||45.90%|
|L&T Technology Services||3,293.90||5,955.50||44.69%|
|Tech Mahindra Ltd.||1,054.00||1,838.0||42.66%|
Larsen & Toubro Infotech
Shares of Larsen & Toubro Infotech Ltd. ended at ₹4,086.90 on the BSE in Monday's trade, down 5.65 per cent. The stock quoted a 52-week low price of Rs.3733.25 and a high of Rs.7595.25.
The stock has fallen 45.90% from its 52-week high. In the last six months, the stock gave a negative return of 39.62%.
At the prevailing price, the stock traded at 31.35 times its trailing 12-month EPS of ₹131.04 per share and 8.61 times its book value.
The stock commands a market capitalization of ₹76,032.13 crore and is part of the IT Consulting & Software-Mid Cap industry.
For the quarter ending March 31, 2022, the company's consolidated net profit increased by 16.8 per cent year on year to ₹637 crore. The company had posted a profit of ₹545 crore in the year-ago period.
Revenue from operations increased 32% to ₹4,302 crore in the said quarter, up from ₹3,269 crore in the same quarter last fiscal.
Promoters held 74.05 per cent of the company as of 31-Mar-2022. FII and MF ownership in Larsen & Toubro Infotech Ltd. stood at 10.08 per cent and 5.65 per cent, respectively.
Shares of Mindtree have fallen almost 39.07% so far in 2022. The share price dropped over 5.91% in Monday's trade and it hit an intraday low of ₹2,881.30 apiece on the BSE.
The stock has dropped 42.91% from its 52-week high and with Monday's closing price, the stock is 19.64% away from its 52-week low.
Mindtree has a market capitalization of Rs. 50,469.51, and the company had a price to book value of 9.22.
On May 10, 2022, Larsen & Toubro announced the merger of its two listed IT services companies – L&T Infotech (LTI) and Mindtree.
The transaction closure is expected in 9 to 12 months, with a swap ratio of 73 shares of LTI for every 100 shares of MTCL, and L&T will hold 68.7% of the combined entity. The new shares of LTI issued will be traded on the NSE and the BSE.
As per brokerage reports, LTIMindtree will be the country's sixth-largest IT player in terms of revenue and profit, after TCS, Infosys, HCL Technologies, Wipro, and Tech Mahindra.
Mindtree reported a 49 per cent YoY increase in net profit for the fourth quarter ended March 31, 2022, at Rs. 473.1 crore.
Mindtree's consolidated revenue from operations grew by 37.4 per cent to ₹2,897.4 crore in during January-March 2022 from ₹2,109.3 crore in the corresponding quarter of 2020-21.
The company delivered an ROE of 30.19% in the year ending March 31, 2022, outperforming its 5-year average of 24.84%.
The company's annual revenue growth of 33.41% outperformed its 3-year CAGR of 14.9%.
The company’s stock is down 1.96 per cent in the last one year. Year to date, it is down 25.78 per cent. Tech Mahindra shares closed at Rs. 1,051 on the BSE on Monday's trade, down 5.22 per cent compared to Friday's close.
From its 52-week high, the stock has dropped 42.66 per cent.
The stock has given a negative return of 35% over the last six months.
Tech Mahindra's consolidated net profit increased 39.2 per cent year on year (YoY) to ₹1,505.7 crore in the fourth quarter ended March 31, 2022.
Revenue from operations was ₹12,116.3 crore during the period under review, up 24.5 per cent from ₹9,730 crore in the previous fiscal period.
The company reported a consolidated PAT of ₹1,506 crore for the fourth quarter, up 10.0 per cent QoQ and 39.2 per cent year on year. For the entire financial year 2021-22, the company reported a 25.7 per cent rise in consolidated PAT at ₹5,566 crore.
The company closed the quarter with a total contract value of $1 billion and the fiscal with $3 billion in the new deals.
For FY-21, the communication vertical remained the mainstay with a revenue share of 39.7 % of the total business. It is one of the highest top-vertical revenue concentrations among IT companies.
Other verticals, such as BFSI, media, and entertainment, saw marginal increases in their contribution to overall revenue.