Infosys, TCS Q3 results lift IT pack by 4%. Wipro, HCL Tech, TechM jump. Here's why

Infosys Ltd delivered better December quarter results on otherwise muted expectations while Tata Consultancy Services (Ltd) came out with healthy Q3 earnings, pushing the BSE IT index up by 4 per cent in Friday's trade. The IT pack gained, as the market rejoiced the absence of any bad news in the results of the two biggest software exporters. It was though debated whether the worst might be behind the IT sector, as the two IT firms did not see any material upturn in demand.

Just like its larger peer TCS, Infosys indicated a status quo on demand conditions and did not indicate a material upturn in 4QFY24. "Commentary on demand was quite similar with both players indicating that the issue was more with compression in projects that were started during the pandemic and where there was no clear ROI visible. Both stated that orders won in the last 9-12 months were translating into revenue without much trouble," Nirmal Bang noted.

Read more: Infosys share price targets, Q3 hits & misses & fundamental outlook

The BSE IT index jumped 1403 points, 3.97 per cent, to 2,327.03. Infosys gained 6.22 per cent to Rs 1,588. TCS shares were up 3.9 per cent to Rs 3,882. Wipro Ltd and HCL Technologies Ltd shares gained 3-4 per cent ahead of their quarterly results later today. Tech Mahindra Ltd (TechM) gained 3.77 per cent to Rs 1,295.60.

“Even though there is no positive message from the management commentary, the market is likely to respond positively to the absence of any bad news. But the upside for TCS and Infosys will be limited since it will take time for clarity to emerge on the prospects for the sector in FY25," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Post Q3 results, PhillipCapital said TCS may continue to command valuation premium to its peers, on the back of its strong diversified profile, superior return profile, management stability, strong margins and market leadership position.

Also read: TCS Q3 results: Profit up 2%, Rs 27 per share dividend announced; deal wins, management commentary, key takeaways

Also read: Infosys ADRs climb 4% overnight post Q3 results. Is the worst behind for IT major?