Wipro, TCS, Infosys, other IT stocks rise up to 2% as rupee hits fresh record low: Here's why

IT stocks gain as rupee declines

The shares of IT companies gained in trade on December 3 after rupee hit a fresh record low, crossing the Rs 90-mark against the US dollar. The rise in the share prices pushed the Nifty IT index higher up to emerge as the top sectoral gainer.

The Nifty IT index rose around 1 percent to 37,885, as seen at 11:35 am.

Rupee at record low:

The rupee opened at an all-time low and crossed the 90-mark against the US dollar on December 3 on persistent equity outflows and uncertainty around the India-US trade deal, currency experts said.

The rupee opened at 89.96 against the dollar and slipped to 90.25, as seen at 12.15 pm.

"USD/INR is expected to trade between 88.90 and 90.20. The 88.80–89.00 band continues to act as a firm support zone. A clean break below 89 would be the first real sign that the rupee is finally ready to pull back and gather strength," said Amit Pabari, managing director at CR Forex Advisors.

Stalled India-US trade talks and heavy FPI outflows are causing this fall despite the weakening of the dollar index, a currency expert said.

IT firms will benefit from the weakening of rupee as most of their revenue is generated in US dollars.

Motilal Oswal sees IT hitting inflection point in next 6-9 months:

Motilal Oswal in its latest note said that it sees and earnings rebound for the IT companies, and IT services hitting an inflection point in the next 6-9 months, driving strong growth in H2 of FY27 and full-scale uptake in FY28 as enterprises move from pilots to broad deployment.

The domestic brokerage noted that the sector trades at a decade-low valuation despite stable profitability, offering asymmetric upside. It added that IT services will stabilize and then grow strongly by FY28 as cloud spending normalizes.

Last week, Motilal upgraded Infosys to 'Buy' from 'Neutral' as it could be a key beneficiary of enterprise-wide AI spends. It also upgraded Mphasis and Zensar to 'Buy' from 'Neutral'. Wipro's rating was meanwhile revised to 'Neutral' from 'Sell'.

Top IT gainers today:

Wipro shares were the top gainers on the Nifty IT index, rising more than 2 percent to trade at Rs 255.54 apiece. Tata Consultancy Services (TCS) shares meanwhile jumped nearly 2 percent.

Infosys, Mphasis and Tech Mahindra shares gained around 1 percent each, while LTI Mindtree, Coforge and HCLTech shares were trading in the green with marginal gains.

Bucking the trend, Persistent Systems shares were down over 1 percent.

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