IT
Stocks Outlook for the week – 14 to 18.09.2015
(Seen in narrow band ahead of US Fed outcome)
( www.rupeedesk.in )
Shares
of information technology companies are expected to trade in a narrow band next
week as
market
remains cautious ahead of US Federal Reserve's monetary policy. The US Fed,
which is
expected
to meet on Sep 16-17, has not given a clear indication as to whether it will
increase the
interest
rate. Also, the rupee's volatility against the US dollar is expected to
continue. The rupee,
which
ended at 66.5375 a dollar yesterday, is likely to trade between 66 to 67 rupees
per dollar.
Investors
are expected to be cautious of taking any risk in the beginning of the next
week as they
take
note of consumer price and wholesale price inflation data and the outcome of
Fed's decision.
Apart
from stocks of the pharmaceutical sector, investors are expected to be cautious
of any other sectors including information technology.
We
are also advising against investing in Tech Mahindra Ltd and Tata Consultancy
Services Ltd.
They
do not see fresh triggers leading to upside for these companies in the near
future. "Tech M is unlikely to report strong US$ revenue growth compared
to peers over the next 1-2 quarters;
expectations
for margins are already elevated. At the lows, we saw valuation support but
remained UW (underweight) because triggers were lacking. With the rise in stock
price since then, we believe even valuation comfort is absent, making the
risk-reward unfavourable.
Market
participants are seen positive on Infosys Ltd, which was the top gainer on
Nifty after it
signed a technology and data services pact with the Association of
Tennis Professionals. Earlier in the week, the US Department of Labor had given
a clean chit to Infosys in its investigation into alleged violations of H1-B
visa norms.