IT Stocks Outlook for the week – 21 to 25.07.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
Stocks of information technology
companies are likely to start the forthcoming week on
a positive note, after Tata
Consultancy Services reported a strong Apr-Jun performance
with 5.5% sequential growth in dollar
revenue driven by 5.7% volume growth. India's
largest IT services company is
witnessing strong traction in digital revenues, indicating
improvement in business fundamentals
for the sector.
In the latter half of the week,
investors will take cues from Wipro which will announce
its first quarter results on
Thursday. Wipro's net profit for Apr-Jun is expected to fall
5.3% on-quarter to 21.07 bln rupees.
Investors will look out for Wipro management's
commentary, especially from Chief
Executive Officer T.K. Kurien, who has been helping
the company execute a turnaround
strategy since 2011, when Chairman Azim Premji put
an end to its joint-CEO model.
Kurien had earlier said that Wipro's
turnaround effort is near complete and that he is
confident of achieving better growth
in the coming quarters. Wipro is also seen gaining
as it has signed a deal with ATCO Ltd
to take over the Canadian conglomerate's IT unit
and provide outsourcing services
worth $112 mln per year.
The Apr-Jun quarter is a seasonally
strong quarter for the IT industry, as client budgets
start rolling out during the quarter.
On the back of this seasonal effect, a general
optimism is likely to prevail.
Investors will continue to closely track the rupee as
currency movement is crucial for IT
companies. Company’s bill majority of their revenue
in dollars and typically for every 1%
change in the dollar/rupee equation, tier-1 Indian
IT companies are impacted
by 25-35 basis points.