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Stocks of major information technology companies are largely seen trading in a range with a positive bias next week, despite the rupee recovering against the dollar, due to benefits from the prolonged weakness in the Indian currency and on improved demand environment. Stocks of technology companies have been on an uptrend since April, when the rupee started slipping against the greenback. The rupee touched its record low of 68.08 against the dollar on Aug 28. The currency has recovered since, and yesterday ended at 61.43 rupees against the dollar. The prolonged weakness in the rupee is expected to help most IT companies report an at least 20-50 basis point expansion in operating margins in the near term. We expect strong volume growth for companies under our coverage, supported by the improving demand scenario. Volumes for the Top 4 companies are expected to rise by 2.5%-4%, organically. On Infosys, which will detail its Jul-Sep results on Oct 11? the Bengaluru-based company is likely to keep its 2013-14 (Apr-Mar) dollar revenue growth guidance of 6-10% intact.
Stocks of major information technology companies are largely seen trading in a range with a positive bias next week, despite the rupee recovering against the dollar, due to benefits from the prolonged weakness in the Indian currency and on improved demand environment. Stocks of technology companies have been on an uptrend since April, when the rupee started slipping against the greenback. The rupee touched its record low of 68.08 against the dollar on Aug 28. The currency has recovered since, and yesterday ended at 61.43 rupees against the dollar. The prolonged weakness in the rupee is expected to help most IT companies report an at least 20-50 basis point expansion in operating margins in the near term. We expect strong volume growth for companies under our coverage, supported by the improving demand scenario. Volumes for the Top 4 companies are expected to rise by 2.5%-4%, organically. On Infosys, which will detail its Jul-Sep results on Oct 11? the Bengaluru-based company is likely to keep its 2013-14 (Apr-Mar) dollar revenue growth guidance of 6-10% intact.
