IT Stocks Outlook for the week – 29.06.2015 to 03.07.2015 Expected to trade with positive bias next week

IT Stocks Outlook for the week – 29.06.2015 to 03.07.2015

Expected to trade with positive bias next week

 ( www.rupeedesk.in )

Stocks of information technology companies are seen broadly positive next week as the upward revision in the revenue growth forecast by outsourcing giant Accenture bodes well for Indian companies too. We believe the results' read-across is positive for India IT from a demand perspective, as they indicate growth momentum improvement in the US on the back of macro improvements and continuation of the strong growth in outsourcing and in Europe.

The "demand outlook remains healthy" and see an increase in IT spends driven by digitalization and automation. They believe Tata Consultancy Services Ltd and HCL Technologies will take the lead in the positive turn of the IT sector. Some sort of bullishness is expected from the IT sector. The positive trend is expected to be led by Tata Consultancy Services Ltd and HCL Technologies Ltd. Some analysts prefer Tata Consultancy Services Ltd and HCL Technologies Ltd among the big companies. The rest (large IT companies)

may catch up. However, TCS and HCL Technologies will remain the top pick.

Mid-cap companies, though, are expected to be range-bound as analysts expect correction in their valuations. They prefer taking the traditional approach of investing in large-cap companies and temporarily avoiding midcap companies. In another development, Larsen & Toubro Ltd had earlier in the week announced its plan to list its IT arm L&T Infotech Ltd on the stock exchanges by December. We expect the company to be in the lower end of the mid-cap range with Mindtree and Mphasis Ltd for competitors.