Earnings-equity valuation gap of Indian IT companies widens, shows data

The combined net profit of TCS, Infosys, Wipro, and HCL Technologies was down 1.5 per cent year-on-year (Y-o-Y) in the December quarter

The Nifty IT index rose by 5.14 per cent on Friday, marking its best performance in a day since July 2020, followed by another 1.9 per cent rally on Monday. With this, the index, which tracks the share prices of India’s 10 biggest information technology (IT) services companies, has increased 7.1 per cent in the past two sessions. However, the substantial rally in the index occurred at a time when India’s four largest IT companies reported their worst quarterly performance in over five years.

This has resulted in a huge gap between the IT companies’ equity valuation and their financial