IT
Stocks Outlook for the week – 17 to 21.11.2014
( www.rupeedesk.in )
Stocks of information
technology companies are expected to be range bound
with a positive bias in
the coming sessions. The optimism following positive US
economic data is also
likely to continue. Cognizant's proposed acquisition of
Odecee, a provider of
digital solutions to enterprises in Australia and New
Zealand region, will
further boost investor sentiment on the sector.
Lately, most IT companies
have been focussing on strengthening their digital
capabilities and this
acquisition only reinforces the trend. Addressing investor
concerns at an event this
week, Infosys's Chief Executive Officer Vishal Sikka
said the company no
longer has the luxury of doing only
"traditional" outsourcing, as clients were no longer looking to
simply cut costs. Instead, he
said, clients wanted their IT partners to enhance their abilities which are
possible through greater levels of automation and innovation.
The concerns though seem
valid given that traditional services, including
business process
outsourcing, still account for about 60% of Infosys' revenue.
Wipro will be in focus as
the company Tuesday won a five-year contract from
Levi Strauss & Co for
outsourcing certain global business services. Levi Strauss will pay Wipro a minimum
of $143 mln in the initial term of the pact.
