NIFTY is an equity index in India operated by NSE Indices Limited, a subsidiary of National Stock Exchange of India (NSE). NIFTY is a blended word created by combining NSE and fifty. However, there are other indices from Nifty like Nifty IT.
What is NIFTY IT (Information Technology)?
NIFTY IT is also an equity index that reflects the performance of top Indian IT companies listed on the NSE. The NIFTY IT index consists of the top ten Indian IT companies representing different business segments of the industry, such as IT services, infrastructure or hardware, and others.
NIFTY IT Index is used for different purposes, such as the launch of IT sector-focused funds, Exchange Traded Funds (ETF), structured products, and benchmarking fund portfolios.
How is NIFTY IT computed?
The NIFTY IT index is computed using the free-float market capitalisation method. The index value is considered as 1,000 on the base date of January 1, 1996. The index level reflects the total free-float market value of the ten IT company stocks. There was a revision in the base value from 1,000 to 100 with effect from May 28, 2004.
What are the IT companies included in NIFTY IT?
The ten NIFTY IT stocks, along with their weights in the index, are listed below:
|Tata Consultancy Services Ltd||29.09|
|HCL Technologies Ltd.||9.19|
|Tech Mahindra Ltd.||7.96|
|Larsen & Toubro Infotech Ltd.||4.54|
|L&T Technology Services Ltd.||2.25|
What are the top 5 stocks worth investing in 2022?
You can invest in top NIFTY IT stocks from an online stock investing platform. Some top stocks worth investing in are as follows:
Tata Consultancy Services is India’s largest IT Services company in terms of revenue and also by market capitalisation. It has delivered a strong financial performance with a 5-year average Return on Equity(RoE) of 35.2% and an operating profit margin of 28.1%. The company commands a premium valuation compared to its peers.
Infosys is the second-largest IT services provider from India, with a global client base primarily from North America and Europe. The company has delivered better performance in recent quarters and is fairly valued compared to its peers. It also has delivered an equally good financial performance with a five-year average Return on Equity(RoE) of 27.2%%..
- HCl Technologies
In recent years, the company stock has performed better than its immediate competitors. It is the third-largest Indian IT services provider deriving significant revenue from overseas like its peers. Its five-year average Return on Equity(RoE) is 25.39% and trades at a PE (Price to Earning) ratio of 23.5.
- Tech Mahindra
Tech Mahindra is another top-tier Indian IT services provider. In recent years, the company has lagged behind its peers in terms of its stock performance.
- L&T Infotech
L&T Infotech is the IT services provider belonging to the diversified conglomerate Larsen & Toubro. The company shares have delivered strong results since its listing in 2016.
NIFTY IT is a useful guide for investors looking for investments in the information technology sector. NIFTY IT index funds offer low-cost and low-risk investment opportunities.