IT stocks shine as depreciation in rupee helps improve margins

MUMBAI: A sliding rupee has come in as a big positive for India’s technology services providers, which are struggling with weak margins amid declining spending by big companies.

IT stocks have outperformed the benchmark in the last few weeks as every 1 per cent depreciation in the rupee against the dollar improves their earnings margin before interest and tax by 20-25 basis points, said analysts.

Tech Mahindra, HCL TechnologiesNSE -1.15 %, InfosysNSE 1.53 %, Tata Consultancy Services, NIIT TechnologiesNSE -0.69 %, Hexaware, Mastek, MphasisNSE -0.70 % and L&T Infotech are some of the top picks of analysts.