IT Sector Q3 Earnings Preview: Compressed Transformation To Offset Seasonality; Focus On FY22 Strength, Says Nirmal Bang
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IT Sector Q3 Earnings Preview: Compressed Transformation To Offset Seasonality; Focus On FY22 Strength, Says Nirmal Bang

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Nirmal Bang Report

In Q3 FY21, Nifty IT index underperformed Nifty by 280 basis points, while it outperformed Nifty by a whopping 4000 basis points in CY20.

The underperformance of Nifty IT in Q3 FY21 can be partly attributed to the already strong run-up in valuation (which was at 10-12 year high) prior to the start of the quarter.

Also, it was offset by the outperformance of heavyweight Nifty Bank vis-a-vis Nifty by 2140 basis points.

One of the reasons for the outperformance of IT vis-a-vis Nifty in Q2 FY21 was outflow from banks on concerns surrounding asset quality. We think those concerns may have diminished in Q3 FY21, leading to Nifty Bank’s sharp upmove.

Click on the attachment to read the full report:

Nirmal Bang Information Technology- Q3 FY21 Result Preview.pdf

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