GOLDEN RULES FOR TRADING

IT STOCKS OUTLOOK FOR THE WEEK – 01 to 05.09.2014

IT STOCKS OUTLOOK FOR THE WEEK – 01 to 05.09.2014

Stocks of information technology companies are unlikely to see any sharp corrections,
and will remain range bound this week.

Investors will continue to track the rupee as currency movement is crucial for IT
companies. IT companies bill majority of their revenues in dollars and consequently they
earn more if the Indian currency weakness against the dollar.

Typically for every 1% change in the rupee/dollar equation, margins of tier 1 Indian IT
companies are impacted by 25-35 basis points.

However, the rupee volatility has significantly come down and consequently IT stocks
will remain largely unaffected by the rupee.

Last week, Infosys Chief Operating Officer U.B. Pravin Rao at an analyst meet said the
company will be in better position to share its new strategy in October. He also said
Infosys has retained its earlier guidance of recording a 7-9% topline growth and margins
between 24-25% for the current fiscal year.

Rao said that though Infosys will continue to focus on growth in the short term, it will
focus on achieving "industry leading" margins in the long term. He said the company
may see short-term margin volatility due to investments.

This week, the market will react to the gross domestic product numbers to be released on
Friday and that might trigger the next directional move. "It's important to note that we are
standing near to the crucial level in benchmarks so either side move would be sharp.
Also, lack of participation from the broader segment is still a major concern for the
participants so it's advised to keep extra caution in stock selection for both trading and
investment activities.

On Friday, Indian markets will remain closed for Ganesh Chaturthi, while on Monday the
markets in New York will be shut for Labor Day