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    In tech meltdown, Indian biggies not hit as hard as global giants

    Synopsis

    According to analysts, IT services exporters have showed gross profit margin expansion despite slower top line growth in the previous quarter, which is expected to continue. The weakness of the rupee against the dollar and slower attrition rates due to layoffs in global IT majors & Indian startups are the other tailwinds for the sector atthe fundamental level.

    Corporate Radar: Globe International, SecMark to trade ex-bonus, Wipro and HCL Tech results and moreiStock
    (This story originally appeared in on Nov 22, 2022)
    Have Indian IT stocks been able to decouple from their global peers listed on Wall Street? That’s a question that several domestic market players are grappling with as they witness a great divide between the newly listed tech-driven companies in India that have seen their stocks crash, while the more traditional ones mostly weathered the global onslaught.

    Consider this: Among the larger Indian IT services exporters, other than Wipro andTech Mahindra, the loss in stock prices of TCS, Infosys and HCL Tech are in mid-teen percentage points to low double digits. In contrast, stock prices of Paytm and Policybazaar have plunged nearly 60%, while Zomato is down 52%. In the same period, stocks of global tech titans like Meta and Amazon have fallen 67% and 45%, respectively.

    According to analysts, IT services exporters have showed gross profit margin expansion despite slower top line growth in the previous quarter, which is expected to continue. The weakness of the rupee against the dollar and slower attrition rates due to layoffs in global IT majors & Indian startups are the other tailwinds for the sector atthe fundamental level.

    On the negative side, the continuing fear of a global recession and record-high energy prices are resulting in muted to no growth in IT budgets of global corporations, especially in sectors like real estate, capital markets and retail, a report by I-Sec said. Given the volatile global market situation, analysts are cautious. “We still believe deployment in the sector should be gradual as there would be unknown risks ahead that might further degrade valuations,” analysts at I-Secwrote.



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    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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