IT sector is one of the best sectors in India when it comes to stock investment. This industry is contributing 8% of the country’s GDP. The domestic revenue of the IT industry was estimated at US$ 44 billion and export revenue was estimated at US$ 147 billion in FY20. Today, in this article, I will discuss top IT stocks in India for investment.
IT companies in India not only contributing to the country’s growth but also contributing globally. In the last 20 years, the IT sector has become the favorite sector for Indian investors. Let’s check why the IT sector is so popular in India.
IT sector has given 107% return in the last one year. Obviously, the period was impacted by a coronavirus, but still, the sector has bounced back greatly in the second half of the year 2020.
Best IT Stocks in India
We will check IT stocks for their performance in the recent past, their financial and technical details. We will also check their future growth potential in the IT industry. So let’s start with the best IT stocks in India.
TCS is the most valued IT company in the world. The company is from the Tata Group. TCS is an IT services, consulting, and business solutions organization that is partnering with many of the world’s largest businesses in their transformation journey for the last 50 years.
The company is well established and generating profits year on year. It is a market leader in the global IT industry.
This stock can give you a higher return than the bank fixed deposit. You can even do stock SIP and accumulate TCS stock at regular intervals. TCS regularly distributing dividends to its shareholders and that return is higher than the bank FD.
Infosys Ltd. is an Indian multinational information technology company that provides business consulting, information technology, and outsourcing services. The company is headquartered in Bangalore. Its Q3 profit was increased by 7.3%. On a year-on-year basis, its revenue has grown by 6.6%. Its digital revenue has grown by 31% which is the highest till now.
This is a good time to accumulate this stock. The future business is promising and its providing healthy dividends to its shareholders. Even Edelweiss is bullish on Infosys and given a target of 2124.
The IT sector is contributing 7.7% of the Indian GDP and is expected to grow to 10% by 2025. This company will play a crucial role in this growth. The current PE of the stock is 33, a bit on a higher side, so one should wait and watch for a fresh buy. You can surely keep an eye on this stock and when the PE goes below 25, you can initiate a fresh buy or can do average.
Wipro Ltd. is another Indian multinational information technology company based out of Bengaluru. The company was incorporated on 29th December 1945 by Mr. Mohmed Premji.
Wipro is consistent in wealth creation for its shareholders. Wipro is one of the best stocks in creating wealth by looking at its sales, PAT, EPS, etc.
The performance of the company is encouraging to invest in this stock. Corporate governance of the company is so strong and steady that makes this company one of the favourite for investment.
If you really want to build long-term wealth, then you must have this stock in your portfolio. Just buy it and forget it, don’t think of selling a single stock of Wipro Ltd. It will give you regular dividends and a price hike will create wealth for you in the long run.
L & T Infotech is an Indian IT company based out of Mumbai. it is one of the top 15 IT companies globally. company’s financials and revenue year-on-year are good. The 3 years revenue growth is 18.8% and the net profit is 16.1%.
This company has a potential go grow many fold in the coming year. It may overtake the leaders like Infosys and TCS in the coming years. The incremental growth is highest for this company as compare to its peers like Infosys, TCS and Wipro.
This stock is recommended in the portfolio for the long term for wealth creation. The stock is currently trading at a high level. So it is advisable to wait for some time. Fresh buy can be initiated once the PE comes below 20. Looking at the current financial and future growth, this stock is a must-have in a watchlist and a long-term portfolio.
IT sector in India is one of the booming sectors and has the potential to grow multifold in the coming years. These companies listed above have the potential of generating wealth in the long run. None of the above top IT stocks in India is for short-term investment. You should hold these stocks for the long period, say 10 years to generate wealth out of them.
Another benefit of investing in these stocks is, you will get high dividends year-on-year basis. That is over and above the price hike benefit, you will get from these stocks. So instead of investing in traditional bank fixed deposits, you should invest in these quality stocks. IT sector has great potential to grow in the coming years in India. And there is not much competition for these well-established companies. Hope this information helps you to make an informed decision on the top IT stocks in India for long-term investment.