TCS vs Infosys vs Wipro: Which IT Stock Is Strongest Ahead of the 2024 US Presidential Elections? Experts weigh in

The 2024 US presidential elections could have a major impact on the prospects for Indian IT services providers. The outcome could lead to changes in trade policy, visa regulations and the movement of the US dollar – all crucial factors for Indian IT players.

Despite headwinds from declining demand and high interest rates in key markets, the IT index has outperformed the benchmark over the past year. The Nifty IT index has risen 31 percent, while the benchmark Nifty 50 has risen 25 percent.

Stocks such as Persistent Systems (up 71 percent), Coforge (up 48 percent), Tech Mahindra (up 45 percent), Wipro (up 41 percent) and HCL Tech (up 39 percent) have made solid gains in the sector. the last year. However, Infosys (+27 percent) and TCS (+18 percent) shares underperformed the IT index.

The potential impact of the US elections on the Indian IT sector

The US elections are an important event for the Indian IT sector as the US is a crucial market for Indian IT services providers. H-1B visa policies and potential tax increases for companies that outsource work are among the key factors that could shape the industry’s future prospects.

Trivesh D, COO of Tradejini, pointed out that the Indian IT sector has historically shown resilience around major US events, including elections, despite heavy dependence on US customers and the broader US economic environment.

“Since 2020, the Nifty IT index has posted a substantial gain of 104 per cent, reflecting the long-term strength of the sector, despite recent pullbacks such as the 3.7 per cent decline seen in October. While US fiscal and monetary policy shapes demand cycles, India’s IT index companies could continue to benefit, especially if the Fed implements rate cuts or if BFSI spending increases in the tech-driven US economy. The significant support for Nifty IT at around 39,800 strengthens market confidence in the stability of IT compared to sectors that face greater pressure such as FMCG and FMCG. metals,” Trivesh said.

TCS vs Infosys vs Wipro: What should you buy ahead of the US elections?

We asked several experts to share their top picks from TCS, Infosys and Wipro ahead of the US elections. This is what they had to say:

Prashanth Tapse, Senior Vice President (Research), Mehta Equities

Selecting individual stocks would be a bit difficult and not the right way to predict the outcome.

Overall, the industry outlook remains cautiously optimistic about IT demand and spending.

There would be some uncertainty about policy outcomes after the election, especially if Trump were to become the next president. His America First policies would put some pressure on the industry as a whole.

“It is an event and the impact would be short-lived and we believe the risk is discounted in the Nifty IT index. The downside would be limited from current levels,” Tapse said.

“For levels to watch, 38,500 could be a level to test and bounce. On stocks, technically, Infosys on ₹1,733 looks good, while Wipro is at ₹541 looks weak on the charts, and TCS on ₹3,946 looks neutral,” Tapse said.

Sagar Shetty, Research Analyst, StoxBox

With the US elections just a day away, the market is preparing for changes in dynamics.

The outcome of the elections is likely to clarify policy direction, strengthen investor confidence and stabilize the market.

Also, given the expected rally link from interest rate cuts, a favorable demand environment is expected.

As the end of the calendar year approaches, we expect an improved pace of deal execution as demand stabilizes and companies prepare their annual budgets.

“Among the top companies that are likely to be the biggest beneficiaries of such a scenario, we remain positive on TCS. The positive outlook is due to the strong market position and the varied product range. The deep dive into the talent pool further indicates a positive demand outlook for the company. We also expect improved deal execution and GenAI-led growth, further improving revenue visibility,” Shetty said.

Ajit Mishra, SVP, Research, Religare Broking

The Nifty IT index has fallen recently after showing remarkable resilience during the current correction, mainly due to the decline in major IT stocks in the US markets.

It is now hovering around a key support level, in line with the 100-day exponential moving average (DEMA).

“Among IT heavyweights, Infosys has shown relative strength, down only slightly from all-time highs, with a slower pace of decline,” Mishra said.

“We expect strong support for Infosys across the world ₹1,680 due to multiple support indicators, offering investors an opportunity to gradually accumulate shares with a medium to long-term perspective,” Mishra said.

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Disclaimer: The above views and recommendations are those of individual analysts, experts and brokerage firms, not of Mint. We advise investors to consult certified experts before making investment decisions.