I.T Stocks Outlook
for the week – 10 to 14.11.2014
( www.rupeedesk.in )
Stocks of information technology
companies are expected to continue trading positive next week on upbeat US economic data
released on Thursday. The US is the largest market for Indian IT services
companies and economic revival there invariably means better business for IT companies in
India.
In the Jul-Sep quarter, North America
contributed 60.8% to Infosys' total revenue, while North America and Latin America
together contributed 52.9% to Tata Consultancy Services' revenue. All IT stocks are
either at or near their 52-week highs, which signifies a bullish trend for the sector.
During the week, Cognizant posted
moderate Jul-Sep results, recording a 2.5% sequential growth in revenue to $2.58
bln. However, what really surprised investors was the company's lifting of its
full-year guidance to 15% growth, which is also the upper end of Nasscom's 13-15%
guidance for the IT sector.
Today, Infosys announced a strategic
partnership with Tableau Software, under which the former will integrate the
business analytics company's software into the solutions it deploys to help clients unlock the
power of data.
During the week, Infosys also
announced its plans to hire over 2,100 employees, including 600 graduates, in the US to
support the growth of its business and enhance capabilities.
On Thursday, Wipro and NYSE-listed
open source solutions provider Red Hat Inc announced global expansion of their
partnership to accelerate deployment of open hybrid cloud solutions. As part of
the expanded collaboration, Red Hat and Wipro will work together to develop and deliver
"enterprise-grade cloud solutions to the market, and will also jointly deliver
next-generation DevOps solutions for continuous integration and testing," Wipro said in a
release.
Investors will continue to closely
track the rupee as currency movement is crucial to IT companies. Typically, for every 1%
change in the rupee-dollar equation, margins of Tier I Indian IT companies are impacted by 25-35 basis
points.
