Rs 9,000 crore-selloff! Infosys, Tech Mahindra on top of FII hate list in Q1

economictimes.indiatimes.com:

Infosys disappointed the Street with a sharp cut in FY24 revenue growth guidance to 1-3.5% from 4-7%, foreign institutional investors or FIIs had already pared stake in the IT services giant. In the June quarter, FIIs sold IT stocks worth over Rs 9,000 crore, with Infosys and Tech Mahindra being the least-liked stocks. The June quarter shareholding pattern data shows that FIIs pared their stake in Infosys by another 165 bps to 33.44%.

In the case of Tech Mahindra, which will report its Q1 results on Wednesday, FII holding went down by 118 bps to 25.69%. Out of the 10 Nifty IT stocks, Wipro, which underwent a share buyback in June, and HCL Technologies are the only two counters where FIIs saw some hope as their holding went up marginally by 6-7 bps. On the other hand, mutual funds were not as bearish on largecap IT stocks.

In Infosys, MF ownership increased from 18.28% to 18.63% at the end of the June quarter. Domestic fund managers raised stakes in TCS and LTIMindtree. Wipro saw MF holding going down to 2.39% from 2.79% while HCL Technologies had MFs decreasing their stake by 17 bps to 7.98%.

In the case of Tier-II IT stocks, MF ownership increased in Coforge, LTTS and Persistent Systems. FIIs reduced stakes in all of them. So far in FY24, Infosys, which faced investor fury on Friday following guidance cut, is the only Nifty IT stock that has given a negative return (of around 7%).

Tier-II IT stocks like Coforge (up 21.5%), LTTS (20%) and Mphasis (30%) have been clear winners this financial year. While TCS' June quarter numbers did not lead to upgrades and Wipro gave weak guidance, investors have been taking solace in deal wins. Despite the uncertain macro environment, TCS reported a strong order book at $10.2 billion