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Stocks of major information technology companies are seen in a range next week as we expect volatility in the Indian rupee to continue for another two weeks before itstabilizes. On Thursday, all Asian currencies tumbled against the dollar after the US Federal Reserve said it might start moderating its bond purchase programme later this year, and stop it completely by mid-2014. The rupee fell to an all-time intraday low of 59.97 per dollar on Thursday, and ended at 59.57 rupees to a dollar, the lowest closing ever. Yesterday, it closed at 59.27 a dollar. According to Cogencis data, the rupee has depreciated around 5% against the dollar so far this month. Following the sharp fall in the rupee against the dollar, Infosys in a statement said it sees a "very high" chance of the Indian currency remaining above 60 rupees per dollar in the near-term, on the back of global and domestic factors. There is a direct impact of cross-currency movements on Indian information technology companies, as most large players in the sector get around 80% of their revenues from overseas. A 1% depreciation in the value of the rupee leads to as much as 50 basis points gains in the operating margins of most information technology companies. Infosys said, We are back to (the) 1990s with high current account deficit, rapidly depreciating currency, high inflation and interest rates and declining growth in GDP (gross domestic product). In the next few trading sessions, analysts and investors may continue to eye
Infosys after the company, on Saturday, announced several measures that will help it
regain its bellwether tag On Saturday, the newly re-appointed Executive Chairman N.R. Narayana Murthy said the task of rebuilding "a desirable Infosys" will take at least 36 months and the process will
involve taking some tough decisions that will result in "pain". Speaking at the company's 32nd Annual General Meeting, Murthy said Infosys will refocus on winning large-ticket deals and while this may improve the company's revenue, its margins may be impacted. He also said the information technology major will adopt a flexible pricing model and will focus on building a predictable earnings model in the medium term. Infosys' inability to provide a flexible pricing has been seen by many analysts as one of
the major reasons behind the company losing its bellwether tag to its biggest competito Tata Consultancy Services Ltd. Murthy also called for the need to focus on employees and said the company needs to enhance confidence and enthusiasm of employees by giving them adequate compensation. On Jun 13, Infosys announced an average 8% hike in wages for their staff based in India effective from July 1. Also, the company said the hike for employees based outside India will be at an average of 3%. Further, he emphasised the need to continue focus on consulting-led solutions and on developing intellectual property-based projects. In addition, Murthy also called for the need to focus on cost optimization and eliminate wasteful expenses.
Stocks of major information technology companies are seen in a range next week as we expect volatility in the Indian rupee to continue for another two weeks before itstabilizes. On Thursday, all Asian currencies tumbled against the dollar after the US Federal Reserve said it might start moderating its bond purchase programme later this year, and stop it completely by mid-2014. The rupee fell to an all-time intraday low of 59.97 per dollar on Thursday, and ended at 59.57 rupees to a dollar, the lowest closing ever. Yesterday, it closed at 59.27 a dollar. According to Cogencis data, the rupee has depreciated around 5% against the dollar so far this month. Following the sharp fall in the rupee against the dollar, Infosys in a statement said it sees a "very high" chance of the Indian currency remaining above 60 rupees per dollar in the near-term, on the back of global and domestic factors. There is a direct impact of cross-currency movements on Indian information technology companies, as most large players in the sector get around 80% of their revenues from overseas. A 1% depreciation in the value of the rupee leads to as much as 50 basis points gains in the operating margins of most information technology companies. Infosys said, We are back to (the) 1990s with high current account deficit, rapidly depreciating currency, high inflation and interest rates and declining growth in GDP (gross domestic product). In the next few trading sessions, analysts and investors may continue to eye
Infosys after the company, on Saturday, announced several measures that will help it
regain its bellwether tag On Saturday, the newly re-appointed Executive Chairman N.R. Narayana Murthy said the task of rebuilding "a desirable Infosys" will take at least 36 months and the process will
involve taking some tough decisions that will result in "pain". Speaking at the company's 32nd Annual General Meeting, Murthy said Infosys will refocus on winning large-ticket deals and while this may improve the company's revenue, its margins may be impacted. He also said the information technology major will adopt a flexible pricing model and will focus on building a predictable earnings model in the medium term. Infosys' inability to provide a flexible pricing has been seen by many analysts as one of
the major reasons behind the company losing its bellwether tag to its biggest competito Tata Consultancy Services Ltd. Murthy also called for the need to focus on employees and said the company needs to enhance confidence and enthusiasm of employees by giving them adequate compensation. On Jun 13, Infosys announced an average 8% hike in wages for their staff based in India effective from July 1. Also, the company said the hike for employees based outside India will be at an average of 3%. Further, he emphasised the need to continue focus on consulting-led solutions and on developing intellectual property-based projects. In addition, Murthy also called for the need to focus on cost optimization and eliminate wasteful expenses.
