“IT Stocks: A Smart Investment Choice for the New Financial Year 2024-25”
As the new financial year 2024-25 kicks off, investors are eyeing the IT segment for potential value picks in their portfolios. After a trend reversal in the last session of the previous financial year, stock market experts are weighing in on whether it’s wise to accumulate IT stocks at this time.
The recent crash in Accenture’s share price, following weak quarterly numbers, had a ripple effect on the Nifty IT index and Indian IT stocks. With ADR prices of Infosys and Wipro also under pressure, Indian IT stocks are currently in a base-building mode. However, experts believe that this presents a buying opportunity for long-term investors, as the Nifty IT index is still below its record high from January 2022.
VLA Ambala, Founder of Stock Market Today, highlighted the impact of Accenture’s cautious forecast on the valuation of IT stocks. He pointed out that the US market trends, high inflation, and slower economic growth could lead to underperformance and reduced revenue for IT companies dependent on the US market.
Despite the recent downturn in IT stocks, the Nifty IT index is trading at a discount compared to the benchmark index. This, coupled with technical analysis indicating potential support levels, suggests that there is room for growth in the IT sector. Investors are advised to consider investing in quality IT stocks gradually over the next few quarters for better gains.
Sandeep Pandey, Founder of Basav Capital, recommended a systematic investment approach in IT stocks, emphasizing the importance of buying large-cap stocks like TCS, Wipro, and Infosys for long-term outperformance. He also suggested considering Coforge and HDFC Tech as potential IT stocks to accumulate in the new financial year.
It’s important to note that the views and recommendations provided by individual analysts and experts are not endorsed by Mint. Investors are advised to consult certified experts before making any investment decisions. As the new financial year unfolds, IT stocks present a compelling opportunity for investors looking to diversify their portfolios and capitalize on the potential growth in the sector.
