A new multi-year wave has started for Indian IT & Infy can outperform

The order book wins, results and big tech companies' performance in Q3 indicates that a fresh multi-year wave has started for the Indian IT sector. Markets knew that a new era has started for the Indian IT sector which explains why the stocks are sitting at a new high. TCS already raised the bar last week, and investors were confident that other top techs would follow the suit - which resulted in a pre-earnings excitement and buying frenzy in the large-cap techs.

This pattern could be a mirror of the last quarter, where stocks rallied pre-earnings and it is now likely that the stocks will not see a runaway rally in the near-term after the numbers. Where then is the rate of change highest within the top 3 IT companies - TCS, Infosys, Wipro. Data points show that Infosys is trading at a discount to TCS, its margins are expanding & markets are convinced that Salil Parekh has managed to turn the ship around. Looking at the key indicators, it is clear that now Wipro is still a work-in-progress, TCS is a comfort trade & Infosys is likely to be the outperformer of the pack, says ET NOW's Managing Editor Nikunj Dalmia.