Midcap IT stocks take a backseat: Stocks correct despite reporting strong results

L&T Technology raised its full-year guidance but has come under pressure.

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L&T Tech is down 4.7 percent for the week, and down 17 percent from the peak hit on October 19. L&T Infotech, too, is off about 10 percent from its peak levels that it hit earlier this week.

Persistent is one of the big losers in the midcap IT space. The stock is down 7 percent ahead of its earnings on October 26.

Some of the IT companies are losing ground because the earnings have been a mixed bag.

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Take, for instance, Mphasis. There was a margin miss — margin came in at 15 percent versus expectations of 15.9 percent.

Both IndiaMart and Just Dial are seeing selling pressure after reporting a tepid set of earnings.

For Just Dial, revenues were down 5.5 percent sequentially, while for India Mart revenues were flat. For Sasken, there was a revenue decline quarter-on-quarter (QoQ).

So the stocks of these companies — where there has been an earnings miss in any form — are getting punished. However, even stocks where there has been a big run-up, despite good earnings, are losing ground.