In spite of over 170 percent rally since April last year, the gains in Information Technology (IT) stocks are showing no signs of abating. The Nifty IT index was ruling 0.5 percent higher on the National Stock Exchange (NSE) in today's(9th June 2021) intra-day trade, has soared 14 percent so far in the calendar year 2021.
According to analysts, the technology upcycle has just begun and sector players are set to reap benefits of the digital boom and cloud adoption. "A distinct trait of this upcycle would be its margin-accretive nature. The biggest differentiator for this cycle is the acceleration it has triggered towards technology spends and quicker decision-making than any other upcycle in the past. All in all, we remain confident that like in past three IT upcycles, multiple re-ratings will be sharp in the early phase of this cycle as well, followed by earnings upgrades as the Street plays catch up," it said in a recent sector-specific report.
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