IT Stocks Outlook for the week – 19 to 23.10.2015
Seen
weak on dull growth outlook; mid-caps bullish
( www.rupeedesk.in )
Stocks
of information technology companies are expected to fall further next week,
after sector leaders Infosys Ltd and Tata Consultancy Services Ltd said growth
in the Oct-Mar period is likely to be muted. Sentiment on the IT sector weakened
after Infosys on Monday cut its dollar revenue guidance for 2015-16 (Apr-Mar)
and predicted a challenging Oct-Mar period.
Additionally,
revenue growth of TCS for the Jul-Sep period was disappointing. Infosys cut its
revenue growth guidance in US dollar terms for 2015-16 to 6.4- 8.4% from
7.2-9.2%, but maintained it is in constant currency terms at 10-12%. The view
on HCL Technologies Ltd, which will detail Jul-Sep earnings next week, is also
poor considering the profit warning it had issued earlier this month. HCL
Technologies's Jul-Sep consolidated net profit is seen falling 2% on quarter to
17.47 bln rupees. The company said it will take a $200-mln charge arisng from
client dispute. Analysts have mixed views on Wipro Ltd after its disappointing
performance in Apr-Jun. Investors are now concerned over its Jul-Sep
performance.
The
company is likely to report a 4% sequential rise in consolidated net profit for
Jul-Sep to 22.6 bln rupees, and a 3% rise to 127.7 bln rupees in consolidated revenues.
On the other hand, analysts are bullish on mid-cap companies after the Jul-Sep
performance of Mindtree Ltd fell in line with market expectations. Mindtree's
consolidated net profit rose 14.5% on quarter to 1.58 bln rupees for Jul-Sep
and consolidated revenue grew 19.12% to 11.69 bln rupees.
