IT Stocks Outlook for the Week – 09 to 13.02.2015
( www.rupeedesk.in )
Stocks
of information technology companies are seen range bound next week in the
absence of any specific triggers. The earnings season for IT companies is
largely over and any correction is unlikely. Tier-I information technology
services companies broadly reported revenues in line with expectations for
Oct-Dec--barring the stellar performance by HCL Technologies, which beat
estimates. HCL Technologies' revenue growth in dollar terms during the said
quarter rose by 12.8% on-year to $1.5 bln. Revenue growth trajectory from US
continues to remain on track at ~12% YoY growth in Dec '14 quarter in line with
recent quarters with cross currency headwinds and some seasonal weakness in
Europe driving the moderation in company-wide growth rates.
Next
week, Bengaluru-based Mphasis will announce its earnings and investors will
watch for the management's outlook and comments on its Direct Channel and
Digital Risk business. Investors will continue to watch 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 61.6950 to a dollar against 61.8600 last Friday.
