Which are the top IT companies in India right now?
As per Equitymaster's Stock Screener, here is a list of the top IT companies in India right now...
- #1 TCS
- #2 INFOSYS
- #3 HCL TECHNOLOGIES
- #4 WIPRO
- #5 TECH MAHINDRA
These companies have been ranked as per their market capitalization. The higher the market cap, the higher the total value of the company.
Of course, there are other parameters you should take into account before forming a hard opinion on the stock valuation.
When should you invest in the IT sector?
As revenue for the IT sector is mainly export oriented, it is largely impacted by the depreciation of the rupee versus the US dollar.
A depreciating rupee is beneficial for the IT sector and vice versa and Indian IT companies have various hedging policies that help them benefit from it.
Therefore, a good time to invest in the IT sector is when the rupee is depreciating.
Where can I find a list of IT stocks?
The details of listed IT companies can be found on the NSE and BSE website. For a curated list, you can check out our list of IT (large) stocks and IT (others) stocks.
What kind of dividend yields do IT stocks offer?
IT companies generally have huge cash reserves, as they do not require very high capital expenditure for growth.
As dividends are mostly paid from the remaining share of profits once essential expenses are met, companies from the IT sector are some of the highest dividend paying companies.
For more details, check out our list of top IT stocks offering high dividend yields.
How should you value IT companies?
Investing in stocks requires careful analysis of financial data to find out a company's true worth. However, an easier way to find out about a company's performance is to look at its financial ratios.
Two commonly used financial ratios used in the valuation of stocks are -
Price to Earnings Ratio (P/E) - It compares the company's stock price with its earnings per share. The higher the P/E ratio, the more expensive the stock.
To find stocks with favorable P/E Ratios, check out our list of IT stocks according to their P/E Ratios.
Price to Book Value Ratio (P/BV) - It compares a firm's market capitalization to its book value. A high P/BV indicates markets believe the company's assets to be undervalued and vice versa.
To find stocks with favorable P/BV Ratios, check out our list of IT stocks according to their P/BV Ratios.