Multibagger stories: 15 stocks from BSE IT index race ahead in 2021 so far
In 2021 so far, the BSE IT index has gained about 38 percent - one the highest returns among sectoral indices. The index has outperformed Sensex, which has gained 16% YTD
In 2021 so far, the BSE IT index has gained about 38 percent - one of the highest returns among sectoral indices after the metal index. The IT index has outperformed the benchmark index Sensex, which gained 16 percent year-to-date. From the BSE IT index, as many as 15 stocks have turned multibaggers, according to ACE Equity data. HDFC Securities remains positive on the sector and has increased target price for most of the IT companies in their coverage universe.
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In 2021 so far, 15 BSE IT stocks have turned multibaggers. Majesco led the pack with a gain of over 400 percent followed by Brightcom Group and Happiest Minds Technologies.
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Comparing the top 5 stocks by market-cap in BSE IT index, Wipro has outperformed all other stocks in share price performance - rising 63 percent in 2021 so far. While sector's top ranked stock by m-cap, TCS has gained 24 percent.
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"The IT sector narrative remains positive and the various dashboards and metrics substantiate the progression. The growth outlook is strong with an improving probability of sustained momentum, despite the transient supply-side challenges," said an HDFC Securities research report. Outlook and valuations: "The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis, and Zensar."
![In 2021 so far, the BSE IT index gained about 38 percent which was among the best performing sector after the metal index. The IT index has outperformed the benchmark index Sensex with a huge gap, as it gained 16 percent. From the BSE IT index, as many as 15 stocks have turned multibagger, according to ACE Equity data. "The IT sector narrative remains positive and the various dashboards and metrics substantiate the progression. The growth outlook is strong with an improving the probability of sustained momentum, despite the transient supply-side challenges," says HDFC Securities research report.](https://images.moneycontrol.com/static-mcnews/2021/08/shutterstock_1050045188-1.jpg "In 2021 so far, the BSE IT index gained about 38 percent which was among the best performing sector after the metal index. The IT index has outperformed the benchmark index Sensex with a huge gap, as it gained 16 percent. From the BSE IT index, as many as 15 stocks have turned multibagger, according to ACE Equity data. "The IT sector narrative remains positive and the various dashboards and metrics substantiate the progression. The growth outlook is strong with an improving the probability of sustained momentum, despite the transient supply-side challenges," says HDFC Securities research report.")
![HDFC Securities research report's outlook and valuations: "The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar."](https://images.moneycontrol.com/static-mcnews/2020/11/Buy_4-1.jpg "HDFC Securities research report's outlook and valuations: "The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar."")
