Infosys, TCS, HCL Tech, Tech Mahindra: IT shares see limited recovery in today's rally, here's why 

IT sector shares such as Infosys, Tata Consultancy Services, HCL Technologies, Tech Mahindra, LTIMindtree and Wipro, among others rebounded today after two days of turmoil in the Indian market. The Nifty IT index, which hit a 17-month low on Monday zoomed 384 points to 33,057 in the current session. On similar lines, BSE IT index rose 400 points to 32,510  in early deals today.  However, gains were modest in comparison to the other sectors on BSE. 

Capital goods, banking and consumer durables indices on BSE climbed 1316 pts, 1113 pts and 1684 points, signaling a stellar recovery in the stock market. 

BSE metal and oil & gas indices too gained 397 pts and 232 points on BSE today. 

Indian IT firms are expected to report a subdued growth in Q4 on seasonal weakness and lower discretionary digital transformation spends, said brokerage Systemtix. The Q4 earnings expectations capped positive sentiment in IT stocks today. 

According to Incred Equities, growth starvation could increase competitive intensity which, coupled with productivity pass-back, could hurt the EBIT margin of the IT sector. 

The timing of recovery in IT stocks almost collides with the Q4 earnings season. Country's largest IT services exporter TCS will start the Q4 earnings season on April 10. 

Despite recovery in the IT stocks, Indian IT firms continue to face challenges as the US grapples with ongoing macroeconomic uncertainties. According to estimates, 49%–62% of Indian IT revenue is derived from the US.  The macroeconomic uncertainty in the US and the global economy also capped gains for IT stocks in today's rally. 

HCL Tech shares gained 1.07% to Rs 1390 on Tuesday. Market cap of the firm climbed to Rs 3.77 lakh crore on BSE.  On similar lines, Infosys stock gained 3% to Rs 1439. Mcap of the IT firm rose to Rs 5.97 lakh crore. 

Tech Mahindra stock climbed 1.43% to Rs 1307 on BSE. Market cap of the firm climbed to Rs 1.27 lakh crore on BSE. 

Shares of TCS rose 0.33% to Rs 3287.35. Market cap of TCS rose to Rs 11.88 lakh crore on BSE. Other IT stocks such as Datamatics (6.63%),  Genesys International (5%), MCCloud (2.81%) , Netweb Technologies (3%), LTIMindtree  Ltd (0.76%), Wipro (1.15%), Mphasis (1.93%), Coforge (2.05%),  Mastek (2.59%), Birlasoft (1.01%), Sasken Technologies (0.05%) and Sonata Software (0.78%) were the top gainers on the BSE IT index today. 

Meanwhile, Sensex climbed 810 pts to 73,948 and Nifty rallied 260 pts to 22,421 in early trade on Tuesday.