IT Stocks Outlook for the week – 09 to 13.03.2015
( www.rupeedesk.in )
Stocks
of information technology companies are seen trading with a positive bias next
week on hopes that the government will execute various projects under the
Digital India and Smart Cities programmes.
In
the Union Budget presented last Saturday, Finance Minister Arun Jaitley
announced several initiatives under the Digital India campaign and talked about
supporting new start-ups to encourage and grow the spirit of entrepreneurship
in India.
The
Budget mentioned the setting up of a "Techno-Financial, Incubation and
Facilitation
Programme"
known as SETU (Self-Employment and Talent Utilisation) with a proposed
investment
of 10 bln rupees. Jaitley also proposed to introduce the Goods and Services Tax
from Apr 1, 2016, which the IT industry was looking forward to. It will be some
residual positive impact of the budget next week as well.
Recently,
the US government announced that from May 26, some holders of the H-4 visa, who
are spouses of high-skilled workers on the H-1B visa, will be eligible for work
authorisation. This would be an additional factor for the industry to rejoice
as IT services companies like Infosys and Tata Consultancy Services are some of
the largest users of the H-1B visa.
Investors
will keenly watch the movement of the rupee against the dollar, though only
significant movement on either side will cause the IT stocks to move.
Typically, for every 1% change in the rupee-dollar equation, margins of tier I
Indian IT companies are impacted by 25-35 basis points.
