IT tops sectoral charts in August

The BSE IT index has emerged as top performer this month, with gains of 10.1 per cent. This is during a month when 10 of the 27 sectoral indices have given negative returns and the benchmark Sensex is up 6.7 per cent.

Mindtree is the top performer among IT firms for the month with returns of 27.2 per cent, followed by Nelco (25.2 per cent) and Tech Mahindra (19.6 per cent).

According to analysts, the spending uptick by clients has contributed to the democratisation of demand but the tight labour market has weighed on the margin performance of IT companies.

Within the IT pack, mid-cap firms have outperformed tier-i companies on revenue growth, even as the former have gained enough scale in competencies to partner with large clients.

Public cloud adoption is still in early stages. Only 15-20 per cent of workload has moved to public cloud, a figure which can reach 60-70 per cent in the next three-four years, according to a report by Kotak Institutional Equities.

The BSE TECK (9.2 per cent), the BSE Energy (8.6 per cent), and the BSE Power (7.9 per cent) were the other top performing indices this month.