I. T Stocks Outlook for the week – 23 to 28.02.2015
( www.rupeedesk.in )
Stocks
of information technology companies are seen trading in the green next week as
expectations
are high on the Union Budget for2015-16 to be presented by Finance Minister
Arun Jaitley on Feb 28. There are expectations of some Budget allocation to
large- and mid-sized IT companies in the form of e-governance projects as part
of Narendra Modi's 'Digital India' campaign.
The
IT sector is expecting the Union Budget to address issues of simplifying tax
and other labour law regulations, offer schemes and investment for employment
and skill development
programmes,
and improve ease of doing business in the IT and IT-enabled services.
“Expectations
are high as this is the first full-fledged budget by the new finance minister
and the Narendra Modi-led government. Recent statements from both the prime
minister and the finance minister have made it clear that there will be a fair
and transparent tax regime.
Implementation
of GST (goods and services tax) will be a game changer for the economy. GST implementation
should be on target date of Apr 2016 and it will also be helpful in reducing
the prices and may lead to increase in exports/local consumption" Rostow
Ravanan, chief financial officer of Mindtree told Cogencis in a recent
interview.
Infosys
will continue to be in focus as earlier in the week it announced a definitive
deal to
acquire
Panaya Inc, in cash, for $200 mln. The provider of automation technology for
large-scale enterprise software management, will add tremendous value to
Infosys' existing enterprise customers. Panaya fits strategically with Infosys'
well articulated dual focus on renew and new.
Investors
will continue to track the movement of the rupee against the dollar, though
only
significant
movement on either side will cause the IT stocks to move.
Typically,
for every 1% change in the rupee-dollar equation, margins of tier-I Indian IT
companies
are impacted by 25-35 basis points. Yesterday, the rupee ended at 62.2200 per
$1
compared
with 62.1950 last Friday.
