5 Best IT Stocks to Buy

One of the most important parts of the Indian economy and a leading source of foreign currency earnings for the country is the information technology (IT) sector. In 2020, the information technology industry was responsible for eight percent of India's GDP, and by 2025, it is expected to contribute around ten percent.

At the moment, India is the world's leading provider of information technology services. Because there is a ready supply of labour that is both highly skilled and relatively inexpensive, the nation enjoys a competitive edge. India is the most important location for sourcing in the world. The country is responsible for providing services to approximately 55 percent of the 185–190 billion USD worldwide service sourcing business as well as 38 percent of the BPM sourcing market.

As a consequence of this, making an investment in the IT sector in order to capitalise on its growth is an idea that makes perfect sense. We have provided a list of five IT companies that have strong fundamentals, and in picking these stocks, we ensured that company has strong fundamentals, a market capitalization of over Rs.10,000 crore and a peg ratio of less than 2.

5 IT Stocks to Buy

1. Tech Mahindra

Market Capitalisation: Rs.93007.20 Cr
PEG ratio: 1.13

About the Company: Tech Mahindra provides a comprehensive range of IT services, including IT-enabled service, application development and maintenance, consulting and enterprise business solutions, etc. to a diversified base of corporate customers in a wide range of industries. The company has a global presence with 1,21,000+ employees across 90+ countries. It services 1,000+ clients including several fortune 500 companies.

2. Mindtree

Market Capitalisation: Rs.45179.85 Cr
PEG ratio: 0.86

About the Company: Mindtree Ltd formerly known as Mindtree Consulting Limited, is a CMMI Level 5 international information technology (IT) consulting and implementation company. It operates in two units: Product engineering services and IT services. Mindtree was started in 1999 by ten industry professionals from Cambridge Technology Partners, Lucent Technologies, and Wipro. The company is also engaged in the business of BFSI, Hitech, and Travel & Transportation.
 

3. Coforge

Market Capitalisation: Rs.20761.34 Cr
PEG ratio: 1.57

About the Company: Coforge is an IT services company providing end-to-end software solutions and services. It is among the top 20 Indian software exporters. Prominent global customers include British Airways, the ING Group, SEI Investments, Sabre, and SITA. Over the years, Coforge has set up subsidiaries in the US, Singapore, Australia, UK, Germany, and Thailand, mainly to market and mobilize projects for the software division. The company has business partnerships with large IT companies across the world.

4. Tanla Platforms

Market Capitalisation: Rs.14346.26 Cr
PEG ratio: 0.39

About the Company: Tanla Platforms Ltd (formerly Tanla Solutions Ltd) is a cloud communications provider enabling businesses to communicate with their customers and intended recipients. It is headquartered in Hyderabad, India. It is a global A2P(application to person) messaging platform provider. It is one of the world’s largest CPaaS players, it processes more than 800 billion interactions annually and about 70% of India’s A2P SMS traffic is processed through its distributed ledger platform-Trubloq, making it the world’s largest Blockchain use case.

5. Happiest Minds

Market Capitalisation: Rs.11816.60 Cr
PEG ratio: 0.57

About the Company: Happiest Minds is an IT company, ranked 4 in IT Services which works on disruptive technologies such as artificial intelligence, blockchain, cloud, digital process automation, the internet of things, robotics/drones, security, virtual/augmented reality, etc.

Bottom line
IT company stocks give greater returns on money invested in comparison to stocks from other industries, and the price movements of IT company stocks are also easier to anticipate. If you have not yet participated in information technology stocks, the time has come to choose the finest performing IT stocks and begin investing.