IT Stocks Outlook for the week – 04 to 08.04.2016
Seen
positive; HCL Tech, Geometric to be in focus
( www.rupeedesk.in )
Stocks
of information technology companies are seen trading with a positive bias next
week, ahead of the announcement of their quarterly financial results. HCL
Technologies, expected to acquire stake in Geometric, will be in focus. The
Reserve Bank of India will detail the first monetary policy statement for
2016-17 (Apr-Mar) on Tuesday. Largely, it is expected to cut the repo rate by
at least 25 basis points.
The
rupee, which has been strengthening against the dollar through the past few
days, is expected to
rise
if RBI cuts rates. On Thursday, the rupee closed at 66.25 against the dollar.
This is seen
marginally
impacting the information technology sector, the majority of whose business is
accounted
for
by the US. Investors and market participants are on a wait-and-watch mode for
any growth-related statements from companies in the sector.
Infosys,
which will announce its Jan-Mar earnings on Apr 15, will kick-off the earnings
season for
information
technology companies. The Bengaluru-based firm, Infosys, is expected to outpace
Tata
Consultancy Services in Jan-Mar quarterly results. We expect TCS'
earnings for Jan-Mar to be slightly lower than those of Infosys. HCL
Technologies is set to acquire engineering solutions company Geometric have
improved the sentiment of investors on both companies. HCL Technologies will acquire
31.1% promoter stake in Geometric in a share-swap deal, which values the latter
at $150-200 mln. The board of directors of Geometric met yesterday to discuss
various strategic and restructuring options, the company said. If the deal goes
through, HCL Technologies shares are expected to see good buying and the same
is reflected in geometric stock price to see further upside.