Shares of information technology giants like Wipro, Infosys and HCL Technologies rallied over 5 per cent each in trade on Monday after the country's largest software services company - Tata Consultancy Services reported stronger than expected December quarter earnings on Friday, igniting hopes of similar earnings expectations from its peer companies, analysts said.
HCL Technologies rose as much as 6 per cent to hit 52-week high of Rs 1,054.00, Wipro rallied 4.83 per cent to record high of Rs 451 and Infosys advanced 5.4 per cent to an all-time high of Rs 1,383.35. All the three IT companies will be reporting their December quarter earnings later this week.
Expectations of strong December quarter by the IT companies on the back of higher demand for cloud services in the back drop of Covid-19 pandemic is the reason behind the rally in IT stocks, analysts said.
TCS' net profit rose to Rs 8,701 Crore in the three months to December 31, 2020, from Rs 8,118 Crore a year earlier. Analysts on average had expected a profit of Rs 8,401 crore, according to Refinitiv data. Revenue from operations jumped 5.4 per cent to Rs 42,015 Crore.
TCS and rivals, Infosys and Wipro, have been winning more large contracts from businesses that are investing in services such as cloud-computing and cybersecurity to support their shift to remote work.
"Growing demand for core transformation services ... have driven a powerful momentum that helped us overcome seasonal headwinds," TCS Chief Executive Officer Rajesh Gopinathan said in a statement to the stock exchanges.
The gauge of IT shares on the National Stock Exchange, Nifty IT index, rose over 3 per cent to hit an intraday high 27,081.80.