IT Stocks
Outlook for the week – 13 to 17.07.2015
(Seen negative bias next week)
( www.rupeedesk.in )
Stocks of information technology
companies are seen trading with a negative bias next week due to
poor performance of sector leader
Tata Consultancy Services Ltd and strength in rupee against
dollar. MindTree will be the
first mid-cap to detail results, on Thursday. The company did not meet
the revenue expectations even
though the estimates for TCS were lowered. But TCS is still the better
one among the rest and I would
recommend 'Hold' rating on the stock.
TCS' results have cast doubts
over the performance of other large-cap IT companies, and expect
Apr-Jun to be a weak quarter.
Large-cap IT companies' shares are seen setting on flat revenues while
bank stocks are rallying. People
prefer selling their IT stocks and moving to another.
Also, the Indian currency was
steady over the week, ending at 63.39 rupees per dollar. The rupee is
seen opening a tad up on Monday
on positive cues from the euro which might strengthen on a
potential deal struck between
Greece and its creditors.
If the Greece issue moves towards
a resolution, the rupee is expected to rise painting a bleak picture
for IT companies of which majority
are exporters. We see some hope in IT companies endeavour to
foray into the digital space
which is expected to transform the IT industry.
Wipro Ltd's arm Wipro Digital
announced its plans to acquire design firm Designit for around 85
mln euro (6 bln rupees) to expand
its presence in the fast emerging digital space. TCS had reported
12.5% growth in revenue from its
digital business. The IT giant said that it is seeing lot of traction
for its digital products from new
and existing customers.
