IT Stocks Outlook for the week – 26 to 30.10.2015
Midcaps
seen more in favour next week Vs large-caps
( www.rupeedesk.in )
Disappointing
performance and weak guidance of large-cap companies have dampened
the
market sentiment for information technology companies which are seen trading
range-bound
next week. Likely strength in the rupee is seen leading to the poor view on
the
IT companies. Market participants are expected to favour midcap companies
instead
in
light of strong performance by Mindtree Ltd and KPIT Technologies Ltd. Rupee is
expected
to rise further on Monday as the Chinese rate cut infused positivity in global
market
markets. The Indian currency ended at 64.8350 rupees per dollar and is seen
trading
in the 64.3500-64.6500 range.
HCL
Technologies Ltd and Wipro Ltd had posted their Jul-Sep results in the week.
Though
Wipro's Jul-Sep performance was largely in line with expectations, the
company's
weak revenue growth guidance for Oct-Dec disappointed investors. The
Bengaluru-based
company guided for a sluggish growth, pegging Oct-Dec revenue in the
range
of $1.84 bln-$1.88 bln, which translates into a sequential growth of 0.5-2.7%.
HCL
Technologies' consolidated net profit for Jul-Sep fell 3.2% sequentially to
17.26 bln
rupees
as a write-off of receivables due to a dispute with one of its clients weighed
on it.
IT
giants Infosys Ltd and Tata Consultancy Services Ltd had also failed to impress
the
market
with Jul-Sep earnings.
Expecting
that Tech Mahindra, which is to detail its Jul-Sep earnings on Nov 3, to be the
deciding
factor for a sector that seems to be loosing its safe bet title. On the other
hand,
mid-cap
companies have surprised the market with strong performance. Mindtree's
consolidated
net profit rose 14.5% on quarter to 1.58 bln rupees for Jul-Sep and
consolidated
revenue grew 19.12% to 11.69 bln rupees. KPIT Technologies had posted a
69.1% sequential rise in consolidated net profit for Jul-Sep to 750.88
mln.