Indian tech giants surge, adding $22 billion to market cap in two-day rally: Report

Indian technology behemoths are off to a stellar start in the new year, with key players, including Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies, collectively witnessing a surge of $22 billion in market value over the last two trading sessions.

The sector's robust performance in the latest quarter, outperforming sales expectations, has spurred investor enthusiasm and brightened the sector's outlook.

Notably, Tata Consultancy Services Ltd. and Infosys Ltd. led the charge, capitalising on stronger-than-anticipated results.

The buoyancy in India's software giants is underpinned by an unexpected surge in sales during the last quarter, defying market expectations. Wipro Ltd., in particular, experienced a notable intraday rally of up to 14 per cent, marking its most significant surge since July 2020.

Analysts attribute this boost to the company's surprise revenue beat, prompting rating upgrades from several brokerages.

HCL Technologies Ltd. achieved a record high, driven by its optimistic revenue growth forecast.

Bloomberg cited analyst Siddarth Bhamre of Religare Broking Ltd., who noted that the positive shift in sentiment is evident in the management commentary, with companies like Infosys expressing newfound optimism.

As the earnings season unfolds, the landscape for global firms' discretionary spending on technology projects remains uncertain.

However, Indian tech giants continue to forge ahead with strategic initiatives aimed at cost reduction and operational efficiency.

Emphasising their commitment to innovation, these companies are also leveraging their expertise in artificial intelligence (AI).

According to Bloomberg, Infosys CEO Salil Parekh highlighted the growing significance of generative AI in client discussions during an earnings call last week.

Analysts and brokerages have responded to the sector's robust performance by upgrading ratings and revising earnings estimates.

At least six brokerages raised their ratings on Infosys post-earnings.

Meanwhile, JPMorgan Chase & Co. analysts upgraded ratings on both Wipro's US and India-listed shares.

Phillipcapital analyst Karan Uppal expressed confidence that further downgrades in earnings estimates are unlikely, anticipating a rebound and growth in earnings for these companies in the next fiscal year, starting April.

(With inputs from Bloomberg)