IT Stocks Outlook for the week – 27 to 31.07.2015
(Expected
to trade in a narrow range)
Stock
of information technology companies will trade in a narrow range in the coming
sessions as market participants remain cautious on the sector. Shares of Tech
Mahindra, which will detail its Apr-Jun earnings Monday, will be in focus.
The
company is seen posting a consolidated net profit of 5.9 bln rupees for
Apr-Jun, up 25% on
quarter,
and net sales of 62.3 bln rupees, up a meagre 2%. Stocks of most software
companies have corrected in the past weeks, and some investors may see this as
a buying opportunity.
Moreover,
sentiment on the IT sector has improved after Infosys on Tuesday posted robust
earnings for Apr-Jun, and raised its dollar revenue guidance for 2015-16
(Apr-Mar). Bengaluru-based Infosys consolidated revenue for Apr-Jun grew 7% on
quarter to 143.5 bln rupees while its net profit fell 2.2% to 30.30 bln rupees.
Mid-cap information technology companies are seen performing better, with
Hexaware Technologies and KPIT Technologies leading the trend.
The
movement in currency exchange rates will also lend cues to the export-oriented
Indian
technology
sector. The rupee is expected to further weaken against the dollar after it
breached the crucial
mark of 64-a-dollar mark. However, the rupee may see some strong support at
64.30 a dollar levels as the Reserve Bank of India had protected those levels
earlier.
