IT Stocks Outlook for the week – 07 to 11.Jul.2014
Stocks of information technology stocks are likely to be upbeat next week on expectations of
a strong first quarter from Infosys which will announce its financial results on Jul 11. The
Apr-Jun quarter is a seasonally strong quarter for the industry, as client budgets start rolling
out during the quarter. The industry is also seeing strong demand trends as developed
economies recover further. Cross currency benefits should also help revenues to the extent
of 30-40 basis points. Margins are expected to be under pressure QoQ (quarter on quarter)
due to the salary hikes, higher visa costs as well as the rupee appreciation.
Given that Tata Consultancy Services has already indicated that growth should be in line
with its expectations, all eyes will be on Infosys. We maintain our constructive view on the
Stocks of information technology stocks are likely to be upbeat next week on expectations of
a strong first quarter from Infosys which will announce its financial results on Jul 11. The
Apr-Jun quarter is a seasonally strong quarter for the industry, as client budgets start rolling
out during the quarter. The industry is also seeing strong demand trends as developed
economies recover further. Cross currency benefits should also help revenues to the extent
of 30-40 basis points. Margins are expected to be under pressure QoQ (quarter on quarter)
due to the salary hikes, higher visa costs as well as the rupee appreciation.
Given that Tata Consultancy Services has already indicated that growth should be in line
with its expectations, all eyes will be on Infosys. We maintain our constructive view on the
