The IT counter was on fire on Monday in an otherwise depressed market, as signs of economic revival in the US and Europe and anticipation of renewed weakness in the rupee on Fed tapering boosted sentiments.
Infosys and HCL Technologies hit fresh all-time closing highs, while Wipro rose to a multi-year high amid positive commentaries on IT outlook.
India’s largest software services exporter TCS on Monday said the next financial year would be a better one compared with the current year on account of an uptick in client spending in the US and Europe.
TCS chief executive officer and managing director N Chandrasekaran said his company expected big growth in demand for technologies like cloud, mobility and Big Data. “The momentum is picking for social, mobile, analytics and cloud (SMAC) technologies, which offer a multi-billion dollar opportunity in revenues for the company over the next three to five years,” he said.
The firm has hired 50,000 employees so far this year.
Some market analysts say IT stocks are good defensive bets, as the beginning of US Fed taper looks imminent.
On the day, Infosys gained 2.25 per cent to close at Rs 3,449.85. This was lifetime closing high for the stock. The IT stock is not far from its all-time high of Rs 3,493.95 it hit in January 2011.
Ashwin Mehta and Pinku Pappan of Nomura India, who met the Infosys management last week, said in a note, “While Infosys has been engaging with clients on next year’s budgets, the management indicated that it was still early to comment on how they will look like. But they have not seen any sign yet that would indicate the budgets will be delayed. Also, regardless of the overall budgets, Infosys expects offshoring spending by clients to be better.”
Viju K George of JP Morgan on Sunday maintained his overweight recommendation for Infosys and projected a 12-month target of Rs 3,800 for the stock.
Shares of TCS rose 0.72 per cent to Rs 2,017.30 on Monday, taking its year-to-date return to 60.29 per cent. Wipro rose 1.01 per cent to Rs 524.20, its highest level since March 2000.
“IT stocks are getting support from the recovery in the US economy. Among the large IT stocks, we prefer Infosys, as we see margin recovery for the firm in the coming quarters. An uptick in the US economy may lead to a rise in volumes and some expansion in margins,” said Rikesh Parikh, assistant vice-president at Motilal Oswal Financial Services.
Prakash Diwan, director of Altamount Capital Management, said, “IT stocks are safe bets due to the looming US Fed taper. In case the US starts rolling back the $85 billion bond-buying programme, it can pressure the rupee, which is good for IT firms.”
Diwan prefers Tech Mahindra and Infosys. He believes the acquisition of Loadstone last year will help Infosys bag new orders starting January.
HCL Technologies rose 0.43 per cent to close at Rs 1,187.15 for the day. The stock hit its all-time high of Rs 1,194 during the session.
The Nomura experts prefer HCL Tech among the tier-I IT firms. While they have buy recommendations on Infosys, they prefer TCS to Infosys on better revenue and earnings predictability and recent underperformance.
Among the mid-cap IT stocks, Oracle Financial, Tech Mahindra, Hexaware and MindTree rose 3.54 per cent, 3.03 per cent, 1.76 per cent and 0.92 per cent, respectively.
Infosys and HCL Technologies hit fresh all-time closing highs, while Wipro rose to a multi-year high amid positive commentaries on IT outlook.
India’s largest software services exporter TCS on Monday said the next financial year would be a better one compared with the current year on account of an uptick in client spending in the US and Europe.
TCS chief executive officer and managing director N Chandrasekaran said his company expected big growth in demand for technologies like cloud, mobility and Big Data. “The momentum is picking for social, mobile, analytics and cloud (SMAC) technologies, which offer a multi-billion dollar opportunity in revenues for the company over the next three to five years,” he said.
The firm has hired 50,000 employees so far this year.
Some market analysts say IT stocks are good defensive bets, as the beginning of US Fed taper looks imminent.
On the day, Infosys gained 2.25 per cent to close at Rs 3,449.85. This was lifetime closing high for the stock. The IT stock is not far from its all-time high of Rs 3,493.95 it hit in January 2011.
Ashwin Mehta and Pinku Pappan of Nomura India, who met the Infosys management last week, said in a note, “While Infosys has been engaging with clients on next year’s budgets, the management indicated that it was still early to comment on how they will look like. But they have not seen any sign yet that would indicate the budgets will be delayed. Also, regardless of the overall budgets, Infosys expects offshoring spending by clients to be better.”
Viju K George of JP Morgan on Sunday maintained his overweight recommendation for Infosys and projected a 12-month target of Rs 3,800 for the stock.
Shares of TCS rose 0.72 per cent to Rs 2,017.30 on Monday, taking its year-to-date return to 60.29 per cent. Wipro rose 1.01 per cent to Rs 524.20, its highest level since March 2000.
“IT stocks are getting support from the recovery in the US economy. Among the large IT stocks, we prefer Infosys, as we see margin recovery for the firm in the coming quarters. An uptick in the US economy may lead to a rise in volumes and some expansion in margins,” said Rikesh Parikh, assistant vice-president at Motilal Oswal Financial Services.
Prakash Diwan, director of Altamount Capital Management, said, “IT stocks are safe bets due to the looming US Fed taper. In case the US starts rolling back the $85 billion bond-buying programme, it can pressure the rupee, which is good for IT firms.”
Diwan prefers Tech Mahindra and Infosys. He believes the acquisition of Loadstone last year will help Infosys bag new orders starting January.
HCL Technologies rose 0.43 per cent to close at Rs 1,187.15 for the day. The stock hit its all-time high of Rs 1,194 during the session.
The Nomura experts prefer HCL Tech among the tier-I IT firms. While they have buy recommendations on Infosys, they prefer TCS to Infosys on better revenue and earnings predictability and recent underperformance.
Among the mid-cap IT stocks, Oracle Financial, Tech Mahindra, Hexaware and MindTree rose 3.54 per cent, 3.03 per cent, 1.76 per cent and 0.92 per cent, respectively.
