IT
Stocks Outlook for the week –16 to 20.03.2015
( www.rupeedesk.in )
Stocks of information technology companies are seen
trading in a range with a slight negative bias next week, as possible
strengthening of the rupee against the dollar may impact their Jan-Mar
earnings. Sector bellwether Tata Consultancy Services sees Jan-Mar dollar
revenue growth being hit by 200 basis points owing to adverse cross-currency
movements and dollar appreciation against the euro, pound sterling and
Australian dollar.
Azim Premji-promoted Wipro is expected to see its Jan-Mar revenue growth being impacted by 200-250 bps owing to unfavourable currency movement. Investors will also eye management commentary and any changes in client budget. In the short run Infosys will continue to trade at over a 10% discount to TCS.
However, valuations may pick up owing to the gradual
improvement in Infosys' revenue and
revival in margins. Investors are also seen favouring
Tech Mahindra and HCL Technologies in the short-to-medium term. We expect Tech
Mahindra to continue posting industry leading
growth, with
stable margins. It remains our preferred pick in the sector.
