Midcap IT firm Mphasis saw its stock fall over 7% today as it hit its lowest level in over a month!
For the unversed, Mphasis is an IT services company which began operations in 1998. The Bengaluru-based company offers IT services such as Application Services, Blockchain, Cloud, Cognitive, Product Engineering, and more.
Today began with a gap-down opening as the stock opened at Rs 2,150 per share. Sellers dominated this stock, causing it to fall below the Rs 2,100 level and close at Rs 2,039.85 per share, down 7.19% in one day.
But why did the stock fall?
The main reason for the decline was a delay in revenue conversion. Management declared that the company's deal wins took longer to convert to revenues.
As such, Citi announced a "Sell" rating on the stock. However, market conditions were adverse for the entire IT sector as Nifty IT fell 1.95% during the day while BSE IT declined 1.96%.
However, according to Emkay Wealth Management, investors can invest in the sector currently. Despite headwind pressures on IT stocks, this sector appears structurally robust and can show long-term growth.
-Aman Agarwal.