List Of Technology Stocks: India’s IT industry contributes an impressive 8% of the country’s GDP. To compare, the overall contribution of the industry was a meager 0.4% in 1991. Of the top 10 IT companies worldwide, 4 are Indian.
India has grown from being the outsourcing capital to hiring in countries like America. The IT sector was born in India around the 1970s when the concept of computers and outsourcing was still new.
No one could have predicted that the IT sector would take over the country and be one of the most important contributors to the economy.
Today most of these companies are listed on NSE and BSE and that’s the discussion for this blog – List of Technology Stocks.
Industry Overview –
There aren’t many businesses today that can operate without involving technology. Either the processes are automated or it requires some degree of involvement with technology.
Even for something as simple as transferring money via UPI, a complex process is involved that runs in the background. Technology stocks refer to IT stocks.
They are software companies that are publicly listed in the stock market. IT companies are involved in different businesses in the technology sector – Banking, Financial Services, Automation, Engineering, AI, and business outsourcing.
India’s IT market is expected to grow to a staggering $19.93 billion by 2025. The IT industry accounted for 8% of the country’s GDP in 2020 and is expected to grow to 10% of the total GDP by 2025.
List Of Technology Stocks/IT Stocks
Here is a list of Technology Stocks or IT Stocks. Keep reading to find out more!
1. TCS (Tata Consultancy Services)
Headquartered in Mumbai, TCS is the Technology head of the Tata Group. It is the most profitable Tata venture, creating billions in wealth for investors and promoters. Tata Consultancy Services was founded in 1968 by Tata Sons.
In 2022, TCS employed well over 600,000 employees worldwide.
By market capitalization alone, TCS is the second-largest Indian company and the largest Indian IT company. It is also the first Indian IT company to cross a market cap of $200 billion.
Financials of TCS –
|Share Price||₹3,168||Market Cap||1,159,846 Cr.|
|3-Year CAGR Sales||14.42||3-Year CAGR Net Profit||10.37|
|Stock P/E||36.09||Industry P/E||28.38|
|Face Value||1||Dividend Yield||1.36|
|Debt To Equity||0||Promoter Holding||72.30%|
|Net Profit Margin||20.05||Price To Book||15.35|
Let’s take a look at the financial performance of the largest Indian IT company.
With a market capitalization of ₹1,159,846 crores, TCS is the largest Indian IT company. TCS reported revenues of ₹1,91,754 crores in FY 2022. Their 3-year CAGR sales is a consistent and positive 14.42%.
Coming to their profits, TCS reported net profits of ₹38,449 crores in FY-2022, making it the most profitable IT company in India. Their 3-year CAGR net profit is 10.37%, the lowest in 5 years.
TCS’s net profit margin for the year ending March 2022 is 20.05%, with very little deviation in the past 5 years.
The IT company has had the highest ROE since March 2018, which was 30.33%. FY-2022, their ROE was 42.99%, which is a very positive figure.
The same can be said for ROCE, which is at its 5-year high of 52.91% (FY-2022).
The shareholding pattern of TCS shows that promoters hold the majority stake in the company at 72.3%. Of their total holding, 0.48% of it is pledged. TCS is virtually debt free with a D/E ratio of zero.
TCS Stock P/E at 36.09 is slightly higher than the industry P/E ratio of 28.38. Finally, talking about its 5-year stock performance, TCS has given an immense return of 145.3%.
We cannot mention IT stocks without talking about Infosys. The company is headquartered in Bangalore and was founded in Pune by N.R. Narayanamurthy.
Interestingly, the IT Titan went public in 1993 and was actually undersubscribed. They had to be bailed out by Morgan Stanley, who bought a 13% stake in the company at its offer price of ₹95 per share.
The performance of the IT company since then speaks for itself. Currently, the stock is trading at upwards of ₹1,400 rupees.
Financials of Infosys –
|Share Price||1,526||Market Cap||642,177 Cr.|
|Stock P/E||36.31||Price To Book||10.62|
|Face Value||5||Dividend Yield||2.03|
|Debt To Equity||0||Promoter Holding||13.11%|
|Net Profit Margin||18.2|
Infosys is the 2nd largest Indian IT company with a market capitalization of ₹6,42,177 crores.
The company has had a steady growth in revenues. In 2018, Infosys reported revenue of ₹70,522 crores. As of 2022, the reported revenues of ₹ 1,21,641 crores. The company’s 3-year CAGR sales are at a 5-year high of 21.3%.
Looking at their profits, Infosys has had a steady upward movement in profits. They reported a net profit of ₹21,146 crores in FY 2022. To compare, their FY 2018 figure was ₹16,100 crores.
The company’s 3-year CAGR net profit is an impressive 19.88%. Infosys has had a steady net profit margin of 18.20%, although the lowest in 5 years.
Infosys stock has a 5-year high ROE of 29.3%, which is a positive sign for investors. ROCE is also at a 5-year high of 35.96%, further adding to the shareholders’ value.
Shareholding reveals that promoters hold the least stake in the company at just 13.11%. The majority of shareholders are the public (35.98%), followed by FIIs (31.72%) and DIIs (18.87%).
There has been no major movement in promoter stake in the company and none of the company’s shares are pledged.
The company has maintained a D/E ratio of zero since 2018, indicating that the company has managed its debt very well and it is debt free.
Infosys stock P/E ratio is 36.31, higher than the industry P/E of 28.38.
In 5 years, Infosys has given a massive return of 221%, the highest of all 5 tech companies on this list.
3. HCL Technologies
HCL is the abbreviation of Hindustan Computers Ltd. The Indian multinational company is headquartered in Noida. It was founded by Shiv Nadar in 1976 and is currently led by his daughter, Roshini Nadar Malhotra. HCL is operational in 52 countries worldwide.
A majority of HCL Technologies’ revenue comes from IT services, primarily from the Americas. The company is also involved in engineering and R&D services as well.
Financials Of HCL Technologies –
|Share Price||1,027||Market Cap||₹2,78,924|
|Stock P/E||23.38||Price To Book||5.1|
|Face Value||2||Dividend Yield||4.09|
|Debt To Equity||0.06||Promoter Holding||60.72%|
|Net Profit Margin||15.78|
With a market capitalization of ₹2,78,924 crores, HCL Technologies is a large-cap IT company. The tech giant has shown a growing trend in revenues and net profits. FY 2022, HCL reported ₹ 85,651 crores in revenues, and 5 years prior, that figure was just ₹50,569 crores.
Similarly, net profit was in the four-figure range at ₹8,709 crores. FY 2022 HCL reported profits of ₹13,524 crores, showing a substantial growth in net profits.
Its 3-year CAGR sales as of 2022 are 19.06%, lower than the previous 3 years, indicating a downward trend.
The 3-year CAGR net profit followed a different trend. FY 2022 showed that the company had a 3-year CAGR net profit of 15.6%, as compared to 13.25% and 13.36% in FY 2021 and FY 2020 respectively.
ROE as well as ROCE of HCL have been consistent and well above 20%. However, both ratios are lower than their 2018 figures.
ROE for 2018 was 23.9%, whereas in 2022 it was 2% lower at 21.8%.
Similarly, ROCE in 2018 was an astonishing 29.22%, but in 2022 saw a 5% drop to 24.58%.
The company has maintained a low D/E ratio of 0.06 in FY 2022, but higher than the 2018 figure of 0.01.
The company’s P/E ratio of 23.38 is lower than the industry figure of 28.38, indicating that the company might be slightly undervalued.
5-year returns of HCL Technologies is an immense 140%.
What started off as a vegetable oil company is now a multi-billion dollar empire. WIPRO was incorporated in pre-independence India. It was known as Western India Vegetable Products Ltd, now abbreviated as WIPRO.
Unlike the other tech companies on this list, Wipro didn’t start as an IT company.
They decided to shift to the IT sector in the 1970s. Wipro got listed on NYSE back in 1999 and achieved the milestone of $1 billion annual revenue back in 2004, being the 2nd Indian tech company to do so.
Financials Of Wipro –
|Share Price||382||Market Cap||209,606|
|Stock P/E||26.46||Price To Book||4.96|
|Face Value||2||Dividend Yield||1.57|
|Debt To Equity||0.23||Promoter Holding||73%|
|Net Profit Margin||15.42|
Wipro has a market capitalization of ₹2,09,606 crores, making it a large-cap IT company. In FY 2022, they reported revenues of ₹79,312 crores and net profits of ₹12,237 crores.
5 years prior, Wipro reported revenues of ₹54,487 crores and net profits of ₹8002 crores indicating an upward trend in both revenues and profits.
The company’s 3-year CAGR sales and net profits are at their 5-year high, at 15.92% and 16.46% respectively. Their net profit margin for FY 2022 is lower than the previous two years at 15.42%.
ROE and ROCE have moved quite marginally in 5 years. FY 2018, ROE and ROCE were 16.6% and 19.9% respectively. The same ratios for FY 2022 are 18.6% and 20.4%, indicating a slowdown in growth.
Promoters hold a majority stake in the company at 73% with no major selloff and no pledged shares, which is a good sign for long-term investors.
Wipro’s D/E ratio is 0.23 for FY 2022, almost double that of 2021 and 2020 figures, indicating that the company’s debt has increased in recent years. The 5-year returns of Wipro are just 71.6%, which is the lowest compared to the other tech titans on our list.
5. Tech Mahindra
We all know what happened to Ramalinga Raju from the Satyam Computer Scam. But what happened to Satyam Computers itself?
Tech Mahindra, the IT head of the Mahindra Group, acquired Satyam after the scandal. They outbid other companies such as L&T to acquire a 31% stake in the company.
Soon after, Tech Mahindra merged with the renamed Mahindra Satyam to form a $2.5 billion dollar tech conglomerate. Like most of the IT companies on this list, Tech Mahindra has a global presence.
Currently, they have business operations and subsidiaries in 60 countries.
Financials Of Tech Mahindra –
|Share Price||1067||Market Cap||104,030|
|Stock P/E||23.68||Price To Book||4.89|
|Face Value||5||Dividend Yield||4.21|
|Debt To Equity||0.06||Promoter Holding||35.24%|
|Net Profit Margin||12.6|
Tech Mahindra has a market capitalization of ₹104,030 crores, making it a large-cap IT company.
Revenues and net profits of the company across 5 years follow a stepping stone pattern, gradually increasing year after year. In FY 2022, they reported revenues of ₹44,646 crores and profits of ₹5,627 crores.
5 years prior, revenues and net profits were ₹30,772 crores and ₹3,786 crores respectively. The company’s net profit margin is at a 5-year high of 12.6%.
The 3-year CAGR figure of sales and net profit are almost similar at 13.3% and 13.6% respectively. Both have dropped from their 2018 high of 16.6% (sales) and 19.3% (net profit).
The company’s return on equity has moved fractionally at 20.7% for FY 2022 vs. 20.16% in FY 2018. The same can be said for its ROCE, having moved just over 1% in the same period. FY 2022 figure for ROCE was 23.5% and for FY 2018, it was 22.3%.
Promoters hold just 35.7% of the company and there has been a slight movement of 0.5% in shareholding since September 2021.
Coming to the D/E ratio, Tech Mahindra has a negligible D/E ratio of 0.06, marginally lower than FY 2018’s D/E of 0.09.
The stock P/E ratio of 23.68 is below the industry P/E ratio of 28.38, hinting at a slight undervaluation. The 5-year returns of Tech Mahindra are 124%, which is a moderate return.
IT is important and it is here to stay, despite the recent downfall the industry has faced in 2022. Despite the good financial performance, IT stocks have taken a beating.
Given the importance of the US economy to Indian IT companies, most of the stocks have plummeted to their all-year lows. To new investors, this could be a good opportunity to invest for long-term returns.
This list of technology stocks doesn’t end here as there are an endless number of tech startups and companies that could very well be the next Infosys or Wipro. Have any suggestions to add to this list? Let us know below.
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