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Shares of information technology companies are expected to trade with a positive bias on upbeat sentiment following Jul-Sep result of sector bellwether Infosys, whose revenue guidance for the current financial year was cheered by the Street. Shares of most technology companies rose yesterday with Tata Consultancy Services and HCL Technologies scaling lifetime highs of 2,138 rupees and 1,168.40 rupees, respectively. Infosys, which hit a 52-week high of 3,338 rupees intraday, raised the lower end of its revenue growth guidance in dollar terms for 2013-14 (Apr-Mar) to 9-10% from 6 10% forecast earlier. The software major posted a consolidated net profit for the quarter ended September at 24.07 bln rupees, a growth of just 1.4% sequentially. All eyes will be on earnings of Tata Consultancy Services and HCL Technologies next week. We expect both Tata Consultancy Services and HCL Technologies to outperform Infosys' revenue growth in the current financial year. Management commentary would be keenly watched given TCS indications of a better FY14F and EBIT margin guidance of 27%. Growth below 4% in constant currency in 1QFY14F could be taken negatively, in our view, given street acceleration expectations for FY14F.
Shares of information technology companies are expected to trade with a positive bias on upbeat sentiment following Jul-Sep result of sector bellwether Infosys, whose revenue guidance for the current financial year was cheered by the Street. Shares of most technology companies rose yesterday with Tata Consultancy Services and HCL Technologies scaling lifetime highs of 2,138 rupees and 1,168.40 rupees, respectively. Infosys, which hit a 52-week high of 3,338 rupees intraday, raised the lower end of its revenue growth guidance in dollar terms for 2013-14 (Apr-Mar) to 9-10% from 6 10% forecast earlier. The software major posted a consolidated net profit for the quarter ended September at 24.07 bln rupees, a growth of just 1.4% sequentially. All eyes will be on earnings of Tata Consultancy Services and HCL Technologies next week. We expect both Tata Consultancy Services and HCL Technologies to outperform Infosys' revenue growth in the current financial year. Management commentary would be keenly watched given TCS indications of a better FY14F and EBIT margin guidance of 27%. Growth below 4% in constant currency in 1QFY14F could be taken negatively, in our view, given street acceleration expectations for FY14F.
