FIIs gung-ho on midcap, smallcap IT stocks; lapped up these 7 stocks in March quarter

The information technology (IT) sector has underperformed the overall equity markets in 2023 amid the ongoing uncertainty in the global economies. Where the BSE IT index plunged 6.5 per cent on a year-to-date basis, the equity benchmark BSE Sensex declined 1.3 per cent during the same period.

The sector has been facing challenges posed by the rising risk of recession and higher inflation in its major export markets of the US and European countries. This stress in the sector is also evident from the dismal financial performance of IT majors including TCS and Infosys in Q4FY23. However, a couple of IT stocks have managed to attract foreign investors despite the challenges posed by global headwinds. Here’s all you need to know:

Ramco Systems: The biggest gainer of foreign investments in this quarter is Ramco Systems. Foreign portfolio investors (FPIs) have increased their stake by 7.76 percentage points to 7.83 per cent in Q4 FY23 from 0.07 per cent in the previous quarter Q3 FY23. This stock has a current market valuation of Rs 790 crore. However, this stock is down 13 per cent YTD.

Coforge: The IT firm, which was earlier known as NIIT Technologies, is ranked second in the list as the foreign investors have raised their stake by 4.1 percentage points to 25.4 per cent in Q4 FY23 from 21.3 per cent in the previous quarter. It has a market capitalisation of Rs 23,800 crore. This stock has gained 1 per cent YTD.

Cigniti Technologies: With a 3.54 percentage point increase in FPIs holdings in the latest quarter, total ownership of overseas investors has reached 5.13 per cent in Q4FY23 from 1.59 per cent in Q3 FY23. Cigniti Technologies has an m-cap of Rs 2,170 crore. Shares of Cigniti Technologies have gained 50 per cent YTD.

KPIT Technologies: KPIT Technologies is at the fourth spot as FPI holdings in this company have increased 3.16 percentage points to 23.42 per cent in Q4 FY23 from 20.26 per cent foreign investor stake recorded in Q3 FY23. It has a current m-cap of Rs 23,260 crore. KPIT share has gained 21 per cent this year.

Nelco: Nelco, an IT hardware and electronics manufacturing company from the Tata group, is ranked fifth in this list. FPIs stake has increased 2.11 percentage points in Q4 to 4.41 per cent from 2.3 per cent in the previous quarter. Nelco has a current m-cap of Rs 1,400 crore. However, shares of the company have declined 14 per cent YTD.

Nucleus Software Exports: The company has recorded a 1.57 percentage point increase in FPI ownership to 4.2 per cent in Q4 FY23 from 2.63 per cent in Q3 FY23. It has a current m-cap of Rs 1,550 crore as the stock has given a 51 per cent return this year so far.

Cyient: Global investors upped their stake in the IT firm by 1.54 percentage points to 32.61 per cent in this quarter. It has a current m-cap of Rs 12,820 crore and the stock has risen 43 per cent in the year 2023 so far.

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