I.T Stocks Outlook for the week – 17 to 21.10.2016

I.T Stocks Outlook for the week – 17 to 21.10.2016 )

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Information technology companies are expected to be volatile next week as investors align
their positions after a dismal show by sector peers Tata Consultancy Services and Infosys in
the September quarter.

The broader market is expected to consolidate next week as investors would be cautious
ahead of corporate earnings for the quarter ended September and due to lack of significant
triggers. Focus will now shift to Wipro, HCL Technologies, and Mindtree who will detail their
earnings on Friday.

Tata Consultancy Services reported its lowest ever quarter-on-quarter rise in sales, recording
a meagre 1% growth in constant currency terms. The software major's consolidated net
profit rose 4.3% on quarter to 65.86 bln rupees.

Infosys decided to cut its dollar sales growth guidance by 260-310 basis points to 8.2-9.2%
for the current financial year, thereby spooking several investors who were expecting only a
100-basis-point cut. The Bengaluru-based firm's decision to cut the sales growth target for
the second time since April led to the Nifty IT index hitting a six-month low of 10116.70
points intraday.

For the next week, movement in the IT sector is expected to be stock-specific. Negative
sentiment in Infosys' stock is likely to persist next week while Tata Consultancy Services'
stock may see some buying