I. T Stocks Outlook for the week – 28.09.2015 to 01.10.2015
May
see buying interest unless RBI cuts rates
( www.rupeedesk.in )
The
information technology companies are expected to witness continued buying
interest unless the Reserve Bank of India cuts interest rates. Majority of
market participants expect the RBI to cut the repo rate by 25 basis points,
while some hold the view that the central bank may maintain the current rates.
However,
repo rate cut of up to 25 basis points has been factored in, and if announced,
is unlikely to cause major triggers. We believe that if the RBI does cut the
rates, market players are seen exiting defensive stocks such as IT and
pharmaceutical to invest in the banking sector. However, this is expected to be
a short-term trend.
In
the week, the sector has witnessed a high rollover of long positions, as the
rupee is expected to continue depreciating against the US dollar. Yesterday,
the Indian currency ended at 66.1550 rupees to a dollar. IT sector are bullish
on Wipro Ltd and Infosys Ltd due to recent announcements of deal wins and
expansion plans made by them.
Prompted
by the strong order pipeline, Wipro said it is increasing its workforce in
Qatar over the next 12 months and also scale up near-shore delivery centres
there. Infosys Ltd is set to get a 13.2-bln-rupee order to develop and provide
software solution for implementing the goods and services tax regime.
In
the week, HCL Technologies Ltd launched a platform integrated with automation services
while Tata Consultancy Services Ltd launched analytics-based software solution.
We are expecting bullish about IT companies' investments in digital services.
The
top four IT companies--HCL Technologies, TCS, Infosys and Wipro—are expected to
gain major market share in automation which is expected to be a revenue
drivers. HCL Technologies Ltd and Wipro Ltd are likely to continue their focus
on automation in infrastructure services.
