I. T Stocks Outlook for the week – 21 to 24.12.2015
(Seen trading in narrow band with
negative bias)
( www.rupeedesk.in )
Stocks
of information technology companies are seen trading in a narrow
band
with negative bias next week as concerns over impact of visa fee
hike
and suspension of Chennai operations on their Oct-Dec performance
persists.
The
US Congress has decided to double the surcharge on H-1B visa to
$4,000
and on L1 visa to $4,500. Several information technology majors
extensively
use these two visas to employ Indian consultants in US.
According
to IT lobby body NASSCOMM, the move will increase Indian
IT
companies' visa costs to $400 mln a year from $100 mln currently and
expect
the visa fee hike to hit IT companies' margins by 30 basis points.
Adding
to the sector's woes, the suspension of operations in flood-hit
Chennai
is seen impacting revenue and margins of some IT companies
with
major operations in the city.
The
rupee, which closed at 66.3950 per dollar yesterday, is seen
marginally
low next week. However, the falling rupee is not seen giving
any respite
to the sector.
Positive
triggers for the sector in the near term, they are positive on the
sector
in the long term on growth in demand and revival of performance
in
Jan-Mar. Sentiment on the sector improved after Accenture's
management
raised its full-year revenue growth guidance for 2016 to 6-
9%
from 5-8% earlier.
The
guidance hike is sentiment positive for India IT, adding it remains
selective
on Indian IT stocks and prefer growth leaders Infosys, Tech
Mahindra and HCL Tech.