Zensar Technologies and Newgen Software Technologies Ltd. experienced significant stock price rallies today, with shares jumping by as much as 16%. This surge reflects a broader rebound in the IT sector, driven by an optimistic start to the June quarter (Q1 FY27) earnings season, which saw the Nifty IT index climb nearly 2%.
Zensar Technologies Sees Strong Buying Interest
Zensar Technologies' shares climbed 15.53% to reach a day high of Rs 516.30. Despite this impressive daily gain, the stock remains down 27.45% year-to-date. Market analysts attribute the strong buying interest to improved sentiment surrounding the IT sector.
Ravi Singh, Chief Research Officer at Master Capital Services, highlighted that the sharp increase in trading volumes suggests substantial institutional buying. Singh noted the stock has breached a key technical resistance level, triggering both fresh purchases and short covering. While the rally strengthens the near-term outlook, its sustainability hinges on the company's upcoming quarterly results and management’s projections for business growth.
AR Ramachandran, a Sebi-registered research analyst at Tips2trades, indicated a bullish trend for Zensar on daily charts, identifying strong support at Rs 453. He suggested that a daily close above the Rs 516 resistance could propel the stock towards an upside target of Rs 583 in the near term.
Newgen Software Breaks Out of Trading Range
Newgen Software also rallied, gaining 14.91% to Rs 542.95, although it is still down 37.19% year-to-date. Singh observed that Newgen's stock achieved a strong breakout after consolidating in a narrow trading range for several weeks. The substantial jump, supported by higher-than-usual trading volumes, points to renewed buying interest and improving market sentiment.
Singh added that Newgen has moved past a critical resistance zone, with momentum indicators turning positive. He believes the rally could extend if the stock maintains its position above the breakout level. Recent business developments and a healthy order pipeline have further bolstered investor confidence. The company's forthcoming quarterly results will be a crucial factor. Sustaining above Rs 500 could maintain a positive bias, with Rs 540-550 marked as the next resistance area.
Ramachandran echoed the bullish sentiment for Newgen, citing strong support at Rs 477. He projected that a daily close above the Rs 543 resistance could lead to an upside target of Rs 614 in the near term.
Broader IT Sector Optimism
The positive momentum in these stocks comes as the broader IT sector shows signs of recovery. Earlier, industry giant Tata Consultancy Services (TCS) reported a 4.62% year-on-year increase in consolidated net profit for the June quarter (Q1 FY27), reaching Rs 13,349 crore. Revenue from operations also grew by 13.93% year-on-year to Rs 72,275 crore, contributing to the overall upbeat sentiment across the IT landscape.