Top IT Stocks 2024

IT stocks are considered the safest bet in any market condition. With consistent dividend payouts and stock price growth, IT stocks have generated massive wealth for investors over the long term. The Nifty IT index, the benchmark index that captures the performance of Indian IT companies, has grown at a CAGR of 20.8% in the last five years, whereas the broader Nifty 50 index has a CAGR of 17.60% in the same period.

Following are the top IT stocks of 2024 based on market capitalization

Top IT Stocks of 2024

Company Name	Market Cap in Rs (Cr)
Tata Consultancy Services Ltd.	15,49,934.2
Infosys Ltd.	7,55,253
HCL Technologies Ltd.	4,35,543.25
Wipro	2,62,575.27
LTI Mindtree Limited	1,62,450.95
Tech Mahindra Limited	1,57,443
Oracle Financial Services Software Ltd	95,057
Persistent Systems Limited	80,187
MphasiS Limited	57,017
KPIT Technologies	47,005

IT Stocks based on Market Cap As of 9th September 2024. List reference- ForbesIndia)

Indian IT companies have continued their strong growth thanks to cost advantages and favorable outsourcing policies. The performance in 2024 has been just as impressive. According to a report, the IT industry’s revenue is projected to grow at an annual rate of 12.98% from 2024 to 2028, reaching US$43.09 billion by the end of that period. This positive outlook is reflected in the NIFTY IT index, which tracks the top Indian IT companies. In 2024, the Nifty IT index has outperformed the broader Nifty index, rising by about 6% year-to-date, compared to the Nifty’s 1.65% gain. But how does this performance compare to other market indices? Let’s take a look.

Source: nseindia.com Returns as of 30th August 2024

Let us understand how each stock mentioned below fared in the market

Tata Consultancy Services (TCS)

Market Cap	CMP (as of 9th September 2024)	All-time High Level	PE Ratio	5 yr CAGR Return	ROCE (FY24)
Rs.16,15,874 crore	Rs.4,466	Rs.4,592	34	16%	64.3%

Return Period: 9th September 2019 to 9th September 2024 (screener.in)

Tata Consultancy Services Limited is the largest IT service-providing company in India by revenue and headcount. It offers IT and IT-enabled services worldwide, including in the Americas, Europe, and India. As of July 2024, the share price of TCS has shown a growth of 12.91% year-to-date (i.e. 1st January 2024 to 31st July 2024) as against the BSE IT growth rate of 12.83%. When compared to the NIFTY50 index, the stock outperformed the one-month index growth of 1.62% by 4.99%. Additionally, TCS share price also outgrew the NIFTY IT year-to-date growth rate of 9.77%. 

The bullish sentiment of the stock can be connected to the company’s positive Q1 results of the financial year 2024-25 and recent projects. The results showed a quarter-on-quarter increase of 2.2% in the company’s revenue from operations, which was Rs.62,613 crore. It also declared a dividend of Rs.10 per share in July 2024. 

As of 22nd July 2024, the company collaborated with the British multinational Rolls-Royce for hydrogen fuel system technology research. Additionally, the company is also set to launch its Generative AI platform, TCS AI WisdomNext™, to ease the adoption of next-gen technologies for companies. 

Infosys

Market Cap	CMP (as of 9th September 2024)	All-time High Level	PE Ratio	5 yr CAGR Return	ROCE (FY24)
Rs.7,96,379 crore	Rs.1918	Rs.1976	29.8	18%	40%

Return Period: 9th September 2019 to 9th September 2024 (screener.in)

Infosys Limited, along with its subsidiaries, offers consulting, technology, outsourcing, and next-generation digital services. They serve clients across North America, Europe, India, and other global markets. Currently, the share price of Infosys has outperformed the BSE IT index (10.23%) and NIFTY IT index (9.53%), with a year-to-date growth rate of 16.3%. The share has a PE (price-to-earning) ratio of 28.37 as of 2nd August 2024, which is lower than the sectoral PE of 36.01. 

As of July 2024, Infosys reported a 7.1% year-on-year profit increase for the first quarter of FY25. The June 2024 quarter saw profits rise to Rs.6,37468 crore, compared to Rs.5,945 crore in the same period last year, resulting in a continued bullish outlook for the stock. The stock has been a real multi-bagger for investors. If you bought 100 shares in Infosys IPO in 1993 for around Rs.9,500, after all the stock splits and bonus issues, your shares would be worth crores. 

HCL Technologies

Market Cap	CMP (as of 9th September 2024)	All-time High Level	PE Ratio	5 yr CAGR Return	ROCE (FY24)
Rs.4,77,293 crore	Rs.1,759	Rs.1,817	29.1	27%	29.6%

Return Period: 9th September 2019 to 9th September 2024 (screener.in)

HCL Technologies is the third-largest IT services company in India in terms of revenue and has expertise in Digital, Cloud, and Engineering. Its 1999 IPO created a milestone in Indian corporate history. The IPO was oversubscribed 27 times, generating a demand for over Rs.20,000 crores for the issue.

In FY2024, the company posted a net profit of Rs.15,710 crore, and as of the quarter ending June 2024, the net profit was Rs.4,259 crore. The stock outperformed the BSE IT index with a 3-year growth rate of 14.53% as against the index rate of 7.62%. However, the year-to-date growth rate is lower than the index. HCL Technologies also recorded a 3-year CAGR revenue growth of 13.4% and a one-year price appreciation of 39.44% as of 9th September 2024. 

Wipro:

Market Cap	CMP (as of 9th September 2024)	All-time High Level	PE Ratio	5 yr CAGR Return	ROCE (FY24)
Rs.2,71,468 crore	Rs.519	Rs.580	218	16%	9.81%

Return Period: 9th September 2019 to 9th September 2024 (screener.in)

Wipro is a leading technology services and consulting company dedicated to addressing its clients’ most complex digital transformation needs. The company caters to all of the client’s needs- from generative AI and immersive experiences to data, silicon chip design, and blockchain solutions. In 2023, Wipro launched the ai360 innovation ecosystem, and the company marked its 79th anniversary in 2024. 

The company recently declared its quarterly results for FY2024-25. The Q1 revenue for FY2025 was Rs.21963.8 crore, slightly lower than the Q1 revenue of Rs.22831 crore in FY2024. The company posted an EPS of Rs.5.75 and an operating profit of Rs.4350 crore for the same period. As for the stock performance, the year-to-date growth rate (4.26%) lags behind both BSE IT (9.69%) and NIFTY IT (9.53%) by a considerable margin. 

Wipro’s stock returns for the last 3 months were 6.87%, and for the last year, it was Rs.20.41% as of 9th September 2024. However, the returns dwindled in the last week to -7.51%. 

LTI Mindtree Limited:

Market Cap	CMP (as of 9th September 2024)	All-time High Level	PE Ratio	5 yr CAGR Return	ROCE (FY24)
Rs.1,81,850 crore	Rs.6,140	Rs.6,443	39.8	30%	31.2%

Return Period: 9th September 2019 to 9th September 2024 (screener.in)

LTI and Mindtree announced their merger on May 6, 2022. FY2024 marked their first full financial year as a combined entity, and their stock made it to the NIFTY50 list. The company offers a wide range of IT services, including Agile, Analytics, Application Development, and more, to clients in various industries across 30+ countries. The company garnered 36.2% of its revenue from BFSI clients, 23.6% from clients in the technology, media & communications industry, and 18.5% of its revenue from manufacturing companies. As of FY2024, the company made a net profit of 4584.6 crore and posted an EPS of Rs.154.85. The company also gave a dividend payout of 42%  and ROCE (return on capital employed) of 31%. 

The company stocks outperformed the NIFTY IT index with a growth rate of 12.07% over last year as of 9th September 2024. However, their growth rate is lower than the BSE IT index (29.82%).  The stock has a PE ratio of 35.43, as against the sectoral PE of 34.94. Additionally, it has given a return of 2.07% over the last month as of 7th August 2024.

Final Words…

The pandemic’s disruptions are now behind us. In 2024, the Indian stock market had a mixed performance, with US market scenarios, elections, and the annual budget announced during the year so far. While some sectors thrived, others fell behind, showing a diverse market sentiment. Major indices like the BSE Sensex, Nifty 50, and Nifty 500 moved in different directions, highlighting varied investor confidence and sectoral changes. How about NIFTY IT? In the last one year, the index returns were around 24% as of August 2024. But will it continue?

Tracking Nasdaq can hint at any upcoming bounce in IT stocks in India, as the Nifty IT index and Nasdaq show a high correlation. A crisis or crash is an excellent opportunity to invest in fundamentally strong IT stocks with proven business records for long-term wealth creation.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQs

Why are IT stocks falling?

IT stocks in India have fared the worst since the 2008 financial crisis. Multiple factors are impacting the price of IT stocks, such as slowing global GDP growth, rising inflation due to the energy crisis and disrupted global supply chain, tight global liquidity conditions, and rising fears of a recession in the US and Europe.

Which is India’s biggest IT stock by market capitalization?

As of 2024, Tata Consultancy Services (TCS) is India’s largest IT stock by market capitalization. TCS, a part of the Tata Group, holds a market cap of around Rs.15.93 lakh crore. Following TCS is Infosys, with a market cap of Rs.7.80 lakh crore as of 29th July 2024.

Which IT stocks have had the highest returns in the last 5 years?

LTI Mindtree and HCL Technologies have given their shareholders stellar returns over the long-term period. In the last five years, LTI Mindtree has given a return of 228.85% as of August 2024. And HCL Technologies, for the same period, has given its shareholders a return of 186.30% in the last five years.