IT Stocks Outlook for the week – 24 to 28.10.2016 (Mixed; HCL Tech seen rising, Tech Mahindra eyed)

IT Stocks Outlook for the week – 24 to 28.10.2016

(Mixed; HCL Tech seen rising, Tech Mahindra eyed)

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The Market participants are likely to be selective in their investments for information

technology companies' stocks as Jul-Sep performance of these companies would be the

deciding factor. Volatility in the broad market due to expiry of the October derivative

series is also seen weighing on the sector. After the dismal performance of Infosys and

Tata Consultancy Services, HCL Technologies' better-than-expected performance in the

September quarter and its positive outlook for the rest of the financial year improved

the view on the sector.

Next week, earnings of Tech Mahindra, the last Nifty IT firm to detail its earnings, and

Hexaware Technologies would be eyed. Tech Mahindra is expected to post a 7.1%

sequential decline in consolidated net profit at 7 bln rupees and consolidated net sales of

70.9 bln rupees in Jul-Sep, up 2.4% on quarter.

If the company meets or beats expectations, then its stock is seen rising up to 450

rupees in the near term. However, if its earnings are below expectations, then the stock

might fall below 400 rupees. During the week, HCL Technologies maintained its

revenue expectation for 2016-17 (Apr-Mar). The company expects to grow 12-14% in

constant currency terms, which translates into 11.2-13.2% revenue growth in dollar

terms. On the operating side, earnings before interest and tax margins for 2016-17 are

seen in the range of 19.5-20.5%.

In the case of Wipro, though the company posted Jul-Sep profit and revenue growth

largely in line with expectations, the company's sales guidance for Oct-Dec

disappointed. The company expects sales from information technology services to be in

the range of $1.92 bln-$1.95 bln, translating to flat-to-2% sequential growth. Shares of

Wipro are expected to fall on Monday and the decline is likely to continue in the short

term.

IT Stocks Outlook for the week – 03 to 07.10.2016 Investors to remain cautious next week

IT Stocks Outlook for the week – 03 to 07.10.2016

Investors to remain cautious next week

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Investors are expected to remain cautious over the information technology sector next week due to

dissatisfactory earnings growth guidance by US-based IT major Accenture Plc. The company expects

a 5-7% rise in sales for the financial year ending August 2017, and its operating margin are likely to

be in the range of 14.7-14.9%, up 10-30 basis points on year. Lower-than-expected earnings growth

guidance by Accenture implies that Indian IT companies might also have trouble securing orders.

Market participants would be averse to risk-taking as they await the results of sector leaders Infosys

and Tata Consultancy Services. Infosys will detail its Jul-Sep earnings on Oct 14.

Volatile rupee and geopolitical tensions are also likely to weigh on the sector which constitutes of

major software and services' exporters. Meanwhile, sentiment in the broader market is likely to be

positive even as the market awaits the Reserve Bank of India's monetary policy on Tuesday. Positive

sentiment in broader market may be favourable for IT sector. HCL Technologies is seen rising next

week on attractive valuations and improved investor sentiment. Stocks of Infosys and TCS are seen

trading in a range with a positive bias. Negative view on Tech Mahindra and Wipro is seen

continuing.

IT Stocks Outlook for the week – 06 to 09.09.2016 Subdued next week as negative view to continue

IT Stocks Outlook for the week – 06 to 09.09.2016

Subdued next week as negative view to continue

( www.rupeedesk.in )

Stocks of information technology companies are expected to trade in a narrow range with a negative

bias next week as investors continue their cautious stance on the sector. Buying in the IT sector is

expected to be limited to select frontline companies in the four-day truncated week. Mindtree

yesterday issued a profit warning that due to various challenges it expects weaker sales and

operating margin in Jul-Sep as compared to the quarter ended June. Sector leader Infosys has

already said that Brexit-led challenges will continue to impact the company's earnings and indicated a

likely second-time revision in sales growth guidance for 2016-17 (Apr-Mar).

With Mindtree issuing a profit warning, this confirms that the financial year is a complete washout for the entire IT sector. Stocks of Mindtree, which ended down 0.9% at 548.85 rupees yesterday. Stocks of other IT companies are also expected to be impacted as concerns over performance of peer

companies would raise. Any rise in the stocks would be momentary as investors may chose to exit

the company.

IT Stocks Outlook for the week – 08 to 12.08.2016 Seen weak as Cognizant cuts 2016 sales guidance

IT Stocks Outlook for the week – 08 to 12.08.2016

Seen weak as Cognizant cuts 2016 sales guidance

( www.rupeedesk.in )

Stocks of information technology companies are seen trading in a range with a negative bias next week, as Cognizant Technology Solutions Corp's weak sales growth guidance for 2016 is seen

weighing on the sector. The US-based IT major cut its sales growth guidance for 2016 to $13.47 bln-

$13.60 bln from $13.65 bln-$14.00 bln earlier. Back home, earlier this week, HCL Technologies

surprised the market with strong Apr-Jun earnings. The Delhi-based company reported a consolidated net profit of 20.5 bln rupees for Apr-Jun, up 5.9% on quarter. Revenue from operations were at 113.4 bln rupees, up 5.9%.

Tech Mahindra, which detailed its earnings on Monday, reported a consolidated net profit of 7.96 bln

rupees, down 9.5% on quarter and income from operations of 69.2 bln rupees, up 0.5%. Analysts,

however, believe investors may are likely to invest in the stock due to low valuations. Analysts

recommend investing in stocks of midcap companies, which are likely to be less risky than frontline

companies. The Indian currency is likely to trade weak against the US dollar, which rose following

robust US July payroll data. The Indian unit ended at 66.77 rupees to a dollar yesterday.

IT Stocks Outlook for the week – 11 to 15.07.2016

IT Stocks Outlook for the week – 11 to 15.07.2016

(Infosys, TCS results to set trend later next week)

( www.rupeedesk.in )

Stock-specific movement is expected in the stocks of companies from the information technology sector in the first half of next week. Later in the week, the Apr-Jun earnings of Infosys and Tata

Consultancy Services will set the trend for the sector. Infosys will detail its Apr-Jun earnings on

Friday while TCS will detail its earnings on Thursday.

The Indian currency, which ended 67.3625 rupees, is expected to depreciate against the dollar next

week on upbeat US jobs data. This is seen giving respite to the companies from the sector which is

major exporters to the US.

The UK's decision to leave European Union is expected to impact the earnings of information technology companies. This gave rise to several growth concerns for these companies in Europe as

this region contributes to 25-30% to the topline of major IT firms. If TCS and Infosys' Apr-Jun

earnings meet market expectations then the sector will see some positive movement.

IT Stocks Outlook for the week – 04 to 08.07.2016 (Seen in a range as Brexit, fall in Sterling weigh)

IT Stocks Outlook for the week – 04 to 08.07.2016

(Seen in a range as Brexit, fall in Sterling weigh)

 ( www.rupeedesk.in )

The stock of most of the information technology companies are Likely to trade in a range next week as UK's decision to leave the European Union and currency volatility are seen weighing on the sector. The stocks are expected not to see any high losses or gains next week as market participants are likely to remain cautious on the sector ahead of the Apr-Jun earnings due shortly.

The Apr-Jun earnings of IT companies are likely to be impacted due to slow client decision making, global economic challenges and around 10% fall in Pound Sterling. The Mid-cap firm KPIT Technologies during the week said it expected its Apr-Jun sales to fall around 4% with consequent

drop in profitability" due to several challenges, including soft demand for enterprise resource planning Solutions. The company also expects sales and profit for Jul-Sep quarter to be flat sequentially.

KPIT Technologies target price by 11% to 170 rupees with a 'Hold' rating. Movement is likely to be stock-specific in large-cap firms as market participants may choose to invest in them for the long term. Large-cap IT stocks has become attractive due to low valuations.

IT Stocks Outlook for the week – 27.06.2016 to 01.07.2016, In range, seen taking cues from broad market

IT Stocks Outlook for the week – 27.06.2016 to 01.07.2016, In range, seen taking cues from broad market

 ( www.rupeedesk.in )

Stocks of information technology companies are seen trading in a range next week, and are likely to

take cues from the broad market. The UK's decision to exit the European Union left the domestic as

well as global markets in the red. This is seen having a negative impact on shares of IT companies

which have 50-60% of revenue coming from their US operations and around 25% from European

operations.

However, analysts are hopeful that markets will recoup losses next week. In either scenario, a major

fall in IT stocks is not expected, even as investors are expected to be cautious next week. With the

UK exiting the European bloc, domestic IT companies are expected to have a plethora of challenges

ranging from immigration laws, uncertain client budgets, evolving economic conditions, and need for

a strategy for unfathomable market conditions in the near term, even as 'Brexit' may hold some

opportunities in the long term.

Yesterday, the pound sterling and the rupee declined around 7% and 1%, respectively, against the

US dollar. The Indian currency closed at 67.9600 against the greenback yesterday. In a relief to the

sector, the rupee is expected to weaken further against the dollar as risk-averse sentiment is seen

continuing next week. Analysts see Tech Mahindra's shares as a good buy for market participants

Looking to make short-term investments. Traders are expected to prefer stocks of sector leaders Tata

Consultancy Services and Infosys who have proven to be safe bets in the past.

IT Stocks Outlook for the week – 13 to 17.06.2016 (Infosys to set trend for sector next week)

IT Stocks Outlook for the week – 13 to 17.06.2016

(Infosys to set trend for sector next week)

( www.rupeedesk.in )

The Information technology stocks are likely to trade on a cautious note next week,

with shares of Infosys seen lending direction to other stocks in the sector. Shares of

Infosys, which touched a one-month low intraday on Friday, are seen falling further

next week.

Earlier in the week, the management of the Bengaluru-based firm said its Apr-Jun

operating margin is likely to fall by 200 basis points on quarter due to ongoing

investments, increased visa costs and wage hikes. In Jan-Mar, the software major's

operating margin was at 25.5%. The company also said it is currently facing softness in some sectors and may post a volatile performance.

These comments from the management of industry leader Infosys are seen leading to

negative sentiment on the sector and are detrimental specifically to Tata Consultancy

Services' performance. Shares of HCL Technologies and Wipro gained from the

negative view on Infosys and TCS during the week. However, the movement is

expected to be temporary, and shares are likely to fall on negative sentiment in the

sector.

IT Stocks Outlook for the week – 06 to 10.06.2016 (Seen up next week on weak rupee; US jobs data eyed)

IT Stocks Outlook for the week – 06 to 10.06.2016

(Seen up next week on weak rupee; US jobs data eyed)

( www.rupeedesk.in )

The shares of information technology companies are seen trading with a positive bias next week on continued fall of the rupee against the dollar. The stocks in the sector will also track the broader market, which this week was buoyed by robust Jan-Mar GDP numbers and above-normal monsoon forecast by the India Meteorological Department. India's GDP grew at 7.9% in Jan-Mar, the highest in the past six quarters. The Nifty 50 today ended at 8220.80, nearly 0.8% higher from previous week's close. The S&P BSE Sensex ended up 0.71% week on week at 26843.03. The Rupee weakening will continue to have a positive bearing on IT stocks. The rupee has weakened over the last two weeks in anticipation of a rate hike by the US Federal Reserve.

We are expecting that Wipro, HCL Technologies and Tech Mahindra as they are perceived as undervalued and some recovery is likely near term. Infosys and TCS are fairly priced; Wipro and HCL Tech are cheap. HCL Tech's last quarter margins were weak; hence the stock is trading at cheap valuation and is likely to rise.

However, as the company has started to bag contracts the stock can see a "decent" movement. On Thursday, the company announced a $75-mln contract win from the motor vehicles department of Nevada, US. Negative trend is seen in midcap stocks as growth is seen stagnating and valuations are expensive.

IT Stocks Outlook for the week – 23 to 27.05.2016 (In range next week; focus on Tech Mahindra)

IT Stocks Outlook for the week – 23 to 27.05.2016

(In range next week; focus on Tech Mahindra)

( www.rupeedesk.in ) 

Stocks of information technology companies are seen trading in a range next week due to lack of positive triggers in the sector and negative sentiment in the broader market. However, weak rupee and negative sentiment in the banking sector may divert investors to IT sector. The Indian currency ended at an over-11-week low against the dollar yesterday, and is expected to depreciate following weeks. Yesterday, the Indian currency ended at 67.44 to a dollar, the lowest closing level since Mar 2. This is seen as a positive for the sector of which majority are software exporters to the US. Stocks of Tech Mahindra will be in focus next week as the company, which will be the last of the large-cap IT companies, will detail its Jan-Mar earnings on Tuesday. So far, barring Infosys, heavyweight IT companies have disappointed market with lower-than-expected performance or weak guidance.

Analysts expect Tech Mahindra to report a 2.2% sequential fall in its consolidated net profit for Jan-Mar to 7.4 bln rupees and a 2.3% sequential rise in consolidated net sales to 68.5 bln rupees. In dollar terms, the company's sales are seen declining marginally from $1.0 bln a quarter ago. The stock is seen performing better than Infosys. Stocks of HCL Technologies, the only large cap stock, are seen trading with a negative bias. Investors need good news from the company's management for a positive trigger in the stock. Analysts have recommended investments in mid-cap IT companies and are bullish on Sonata Software and eClerx Services, which posted Jan-Mar earnings above estimates. eClerx Services reported a 22% sequential rise in Jan-Mar consolidated net profit to 1.1 bln rupees and consol net sales of 3.43 bln rupees, flat on quarter.

Auto Stocks Outlook for the week – 23 to 27.05.2016 (Seen range bound; Bajaj Auto Jan-Mar results eyed)

Auto Stocks Outlook for the week – 23 to 27.05.2016

(Seen range bound; Bajaj Auto Jan-Mar results eyed)

 ( www.rupeedesk.in )

Stocks of major automakers are expected to trade range-bound in the week ahead, with Bajaj Auto's earnings for Jan-Mar expected to give direction to stocks. The Pune-based automaker is expected to announce its earnings for the quarter ended March on Wednesday. Healthy growth in volumes, led by a better product mix and benign input costs, are likely to lift Bajaj Auto's net profit for Jan-Mar by 29.7% on year to 8.06 bln rupees.

The company's net sales for Jan-Mar are seen rising 14.7% on year to 53.02 bln rupees. Other sector heavyweights Tata Motors and Mahindra & Mahindra are expected to announce their Jan-Mar earnings on May 30, which will guide automobile stocks in the near term. Stocks of Maruti Suzuki India are expected to give up some gains made over the past few sessions, as the company has recalled 20,427 units of its S-Cross crossover vehicle. But analysts remain largely positive on the company's shares in the long run due to its petrol-heavy portfolio of vehicles. Given the successful new launches, a shift in demand to petrol variants, the forecast of a good monsoon, and implementation of the Seventh Pay Commission's recommendations.

IT Stocks Outlook for the week – 09 to 13.05.2016 Mixed; Wipro, Infosys weak, Tech Mahindra positive

IT Stocks Outlook for the week – 09 to 13.05.2016

Mixed; Wipro, Infosys weak, Tech Mahindra positive

( www.rupeedesk.in )

Weak sentiment in the broader market and lower-than-expected guidance are seen weighing on the

stocks of information technology companies, which are seen trading in a range with a negative bias

during the coming week. US-based Cognizant Technology Solutions Corp expects to report 4-6%

sequential growth in Apr-Jun sales at $3.34-3.40 bln. Also, it marginally cut the upper end of its

guidance for financial year 2016 to $14.00 bln from $14.20 bln earlier.

At the lower end, the company expects to report 2016 sales at $13.65 bln. This translates to approximately 10-13% onyear growth, slightly above NASSCOM's guidance of 10-12%. The sales guidance for Cognizant, seen as a trendsetter for the sector, is seen as a positive and some stocks may rebound towards the end of the week. The Indian currency, which closed at 66.5450/dollar yesterday, is expected to weaken against the dollar, giving some respite to the sector, a major exporter to the US.

IT Stocks Outlook for the week – 02 to 06.05.2016 Stock-specific movement seen; HCL Tech seen weak

IT Stocks Outlook for the week – 02 to 06.05.2016

Stock-specific movement seen; HCL Tech seen weak

 ( www.rupeedesk.in )

The movement in the information technology sector next week is expected to be stock-specific, with

a majority of companies trading in a range. Market participants are expected to follow the earnings

trend of IT companies closely to take investment decisions. The Indian currency, which closed 66.4

rupees against the dollar yesterday, is seen strengthening the following week. Sentiments in US

market have weakened on account of poor economic data and unclear stance of US Federal Reserve.

However, these factors are not expected to have a significant impact on the IT sector on account of

on going results. The US Federal Open Market Committee left the federal funds target rates unchanged at 0.25-0.50% but omitted language from its March statement implying global economic risks. Additionally, data released on Thursday showed that US first-quarter GDP grew by only 0.5%, lower than economists' estimates of around 0.7%. Following disappointing Jan-Mar earnings, analysts have cut the target price on HCL Technologies' stock. The company's consolidated Jan-Mar net profit grew a mere 0.3% sequentially to 19.26 bln rupees as compared to expectations of 19.53 bln rupees. The company's operating margin stood at 22.2% as against 21.5% a quarter ago, disappointing the market. Wipro's weak guidance and Tata Consultancy Services lower-than-expected Jan-Mar margins have led to weakness in the stocks.

IT Stocks Outlook for the week – 25 to 29.04.2016 (In narrow range next week; HCL Tech result in focus)

IT Stocks Outlook for the week – 25 to 29.04.2016

(In narrow range next week; HCL Tech result in focus)

 ( www.rupeedesk.in )

Most information technology stocks are seen trading in a narrow range next week, with

stock-specific movement expected in some driven by Jan-Mar earnings and guidance

for the current financial year.

Weak guidance last week by Wipro Ltd and industry leader Tata Consultancy Services

Ltd continue to weigh on the sentiments for the sector. In the coming week, all eyes

will be on HCL Technologies Ltd which will detail its quarterly earnings on Thursday.

The IT major is expected to report 1.7% sequential rise in Jan-Mar consolidated net

profit to 19.20 bln rupees and 4.4% rise in net sales to 103.41 bln rupees.

The market is bullish on the company as most of them are expecting its acquisition of

Geometric Ltd as positive, allowing HCL Technologies access to the Mumbai-based

company's business in automotive and aerospace industries.

So far, Tata Consultancy Services, Wipro and Infosys Ltd among Nifty 50, and

Mindtree Ltd and Cyient Ltd among mid-cap IT stocks, have detailed their earnings.

Wipro shares, which took a beating this week after weak sales growth guidance of 1-3%

for Apr-Jun, are expected to trade range-bound between 545 rupees and 565 rupees next

week.

TCS, which reported 5.4% sequential rise in consolidated net profit at 64.1 bln rupees

and 4% growth in net sales to 284.5 bln rupees, traded in the red due to operating

margins falling 50 basis points to 26.1%. Infosys was the better performer among IT

stocks last week as investors remained upbeat on the company's dollar sales growth

guidance of 11.8-13.8% in FY17, consistent with 10-12% growth forecast by industry

body National Association of Software and Services Companies.

Mid-cap stocks Mindtree and Cyient recorded moderate growth in sales but drop in

margins eroded the sentiment. The rupee-dollar rates are expected to remain flat over

the week till Federal Open Market Committee meeting on Apr 26-27.

IT Stocks Outlook for the week – 11 to 15.04.2016 (In range; Infosys Jan-Mar earnings to set trend)

IT Stocks Outlook for the week – 11 to 15.04.2016

(In range; Infosys Jan-Mar earnings to set trend)

( www.rupeedesk.in )

Shares of information technology companies are expected to trade in a range next week

as market participants may avoid taking any major bets on the sector ahead of earnings.

The Indian currency, which closed at 66.4700 rupees today, is expected to strengthen

further against the US dollar in the upcoming weeks. This is seen marginally affecting

the sentiment for the information technology sector, a majority of whose business is

accounted for in the US.

Next week, the focus will be on Infosys Ltd as it would kickstart the earnings for the IT

sector. Market participants will wait for Infosys revenue growth guidance for 2016-17

(Apr-Mar) which is expected to set the trend for the sector. The Bengaluru based company will detail its Jan-Mar earnings on Friday and is likely to report a 2% sequential rise in consolidated net profit to 35.5 bln rupees and a 4% sequential rise in net sales to 165.8 bln rupees.

Shares of HCL Technologies, which gained in the past week on Geometric stake buy deal, are seen maintaining the positive momentum and are expected to touch a one month

high of 848.9 rupees per share in upcoming weeks.

IT Stocks Outlook for the week – 04 to 08.04.2016 Seen positive; HCL Tech, Geometric to be in focus

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.

IT Stocks Outlook for the week – 21 to 25.03.2016 Seen in range; Infosys may cross all-time high

IT Stocks Outlook for the week – 21 to 25.03.2016

Seen in range; Infosys may cross all-time high

( www.rupeedesk.in )

Stocks of information technology companies are likely to move in a narrow range with positive bias

next week, which will see trading only on the first three days. Markets will be closed on Thursday and Friday for Holi and Good Friday, respectively.

Even though few headwinds prevail for the sector, stock-specific performance is expected to improve

sentiments of the investors and market participants.

The rupee, which closed at 66.50 against the dollar yesterday, is likely to appreciate against dollar on

prevailing positive risk sentiment following dovish stance by US Fed.

The US Federal Reserve left rates unchanged and forecasted just two rate hikes of 25 basis points each in 2016. Rupee appreciation, though expected to be momentary, is seen partially impacting investor sentiment on the IT sector negatively.

Also, visa concerns have resurfaced for the sector. The UK government has increased visa fees for

tourist, students and workers, effective from yesterday. And with US Republican presidential

frontrunner Donald Trump rallying against H-1B work visa issued to immigrant employees, things

seem to be bleak for the sector which is one of the largest users of the work visa.

However, stocks of Tata Consultancy Services are expected to be rangebound as mixed view on the

company post management meet. TCS showcased its digital offerings across key verticals including

banking, financial services, and insurance, retail, healthcare and energy.

IT Stocks Outlook for the week – 29.02.2016 to 04.03.2016 (Stock-specific movement likely, focus on Budget)

IT Stocks Outlook for the week – 29.02.2016 to 04.03.2016

(Stock-specific movement likely, focus on Budget)

 ( www.rupeedesk.in )

Shares of information technology companies are seen in a range, largely

with a positive bias, and stock-specific movement is expected next week.

On Monday, Finance Minister Arun Jaitley will detail the Union Budget

for 2016-17 (Apr-Mar).

Industry body NASSCOM has recommended simplification and

rationalisation of tax policies for IT companies as well as emerging startups,

extension of the sunset clause for the special economic zone scheme,

and ease of doing business, among others.

In the following sessions, sector leaders Infosys and HCL Technologies

are expected to trade with a positive bias. During the week, Infosys

extended Chief Executive Officer and Managing Director Vishal Sikka's

tenure until March 2021. This was welcomed by the market as a positive

move for the company. At a recent conference, Sikka said that

automation and virtual reality will be key contributors to the company's

growth.

IT Stocks Outlook for the week – 15 to 19.02.2016 (Seen in range; wary on near-term growth)

IT Stocks Outlook for the week – 15 to 19.02.2016

(Seen in range; wary on near-term growth)

 ( www.rupeedesk.in )

Shares of information technology companies are seen in range. On

Monday, US-based Cognizant Technology Solution Corp had said that it

expects Jan-Mar revenues to be flat or see negligible growth, due to

unpredictable spending in healthcare and financial services verticals.

Following this, we raised concerns for Indian information technology

companies, which have high exposure to banking and healthcare

verticals. However, allaying doubts over weak revenue visibility forecast

from banking, financial services and insurance segment business in key

markets.

Following suit, Infosys Chief Operating Officer Pravin Rao and Tech

Mahindra Chief Executive Officer C.P. Gurnani said they do not foresee

any headwinds in the banking and healthcare sector, and see good

demand for their services. Even as we are in a down-cycle, we continue

to have faith in the long-term growth story of Indian IT services. Our

preference remains with companies with the most beaten down valuations

and the lowest expectations.

The Indian currency, which ended at 68.23 against the dollar yesterday, is

expected to depreciate further in the following week. This may improve

the sentiment on the sector of which majority are exporters of IT services

to the US

Bank Stocks Outlook for the week – 08 to 12.02.2016 (To take cues from Oct-Dec results, economic data)

Bank Stocks Outlook for the week – 08 to 12.02.2016

(To take cues from Oct-Dec results, economic data)

  ( www.rupeedesk.in )

Bank stocks will take cues from Oct-Dec earnings and key economic data

scheduled next week and trading would be mainly stock-specific. Sector

heavyweight such as State Bank of India and Punjab National Bank along

with Union Bank of India, Bank of India, Central Bank of India and

Oriental Bank of Commerce, among others, will report their Oct-Dec

results in the coming week.

After the sharp sell off due to the on-going worries over NPAs (nonperforming

assets), there has been some rebound mainly due to value

buying. PSBs (public sector banks) will be tracked to gauge further

position on NPAs. The recovery was mainly led by private sector banks.

Banks have reported sharp drop their profitability on jump in

provisioning following the Reserve Bank of India's direction to reclassify

certain accounts over two quarters starting Oct-Dec. The central bank has

kept March 2017 as the deadline for banks to clean up their books.

RBI Governor Raghuram Rajan on Tuesday said that banks have "fair

span of time" to recognise stressed assets and ensure adequate

provisioning to meet the central bank's deadline on dealing with stressed

assets.

The Bank Nifty has not seen aggressive short additions in the last few

sessions despite trading near 52-week low. This means traders are

expecting some short covering at current levels in the index, which can

take it towards 15500.

At the fag end of next week, market participants will eye economic data

for further cues. Consumer price index-based inflation data for January

and industrial production data for December will be detailed on Friday.