nisha, in the fourth line you have opened file in write mode '>' (which will remove the existing content in the file). So you change it '<' else remove it (default is read mode), and proceed. Also take a look at perlre and perlopentut

#!/usr/bin/perl
$ModFile = $ARGV[0];
$Setting = $ARGV[1];

open (FH, "<", "$ModFile") or die ("Cannot open $ModFile.\n");

open FOUT, ">", "$Setting" or die ("Cannot open $Setting.\n");
while (<FH>)
{
    $text = $_;
    chomp($text);
        
    if($text =~ /^Identity/i)
    {
      
     $text =~ s/=(.*?)$/= ABC/s;
    
    }
print FOUT $text;
}
[download]

TIMTOWTDI

#!/usr/bin/perl
$ModFile = $ARGV[0];
$Setting = $ARGV[1];

open (FH, "<", "$ModFile") or die ("Cannot open $ModFile.\n");
open FOUT, ">$Setting" or die "Cannot open $setting.\n";

$text = do {local $/; <FH>};

$text =~ s/^(Identity\s*\=)[^\n]*$/$1 ABC/si;

print FOUT $text;
[download]