IT Stocks Outlook for the week – 28.12.2015 to 01.01.2016
Seen
range bound with stock-specific movement
( www.rupeedesk.in )
Stocks
of information technology companies are seen trading in range and stockspecific
movement
is expected in the following week. Analysts do not expect major
triggers
in the sector ahead of earnings.
Reasonable
valuations of some midcap companies such as Just Dial, Sonata Software,
Geometric
and KPIT Technologies have led market participants and investors to have
a
positive bias towards these stocks. Infosys and Tata Consultancy Services are
expected
to see some positive movement as participants would prefer to invest in safe
stocks
in a market which is seen volatile next week.
Analysts
have a mixed view on Wipro which made an announcement of acquisition of
US-based
Viteos Group in a bid to expand its capital market portfolio in fund
accounting
services and to enhance the company's business process services
capabilities.
Wipro has been lagging peers in growth terms. Whle not materially
aiding
to revenues, assuming 20% each in FY16-17, the acquisition adds ~0.5% to
overall
growth...While these acquisitions do not alter our FY17-18 EPS estimates
materially,
it will help the company bridge the growth gap with peers.
The
weak sentiment around Tech Mahindra post the acquisition of Italian car
designer
Pininfarina
continues to persist and the stock is expected trade slightly negative next
week.
We expect the near-term stock price performance to be subdued... At current
levels,
valuation is reasonable, which is likely to prevent a major downside. HCL
Technologies' stock is
also seen trading slightly negative in the following week.