IT Stocks Outlook for the week – 10 to 14.04.2017
IT Stocks Outlook for the week – 10 to 14.04.2017
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IT Stocks Outlook for the week – 10 to 14.04.2017
( www.rupeedesk.in )
Stocks of information technology companies are seen moving in a narrow range with a negative bias next week, as investors await Jan-Mar results. IT giant Infosys will kick start the earnings season for the sector and announce its results on Thursday. While the market speculates whether Infosys will give any guidance on its revenue growth during 2017-18 (Apr-Mar) after having cut its view thrice in 2016-17 (Apr-Mar), some analysts expect the company to guide its growth in a range of 7-10% in constant currency terms and 6-9% in dollar terms. The technology company had revised its revenue growth guidance for 2016-17 to 7.5-8.5% in dollar terms from 11.8-13.8% guided in April last year. If Infosys reduces its guidance as compared to last year then that heat will be seen on the stock next week. The company's quarterly performance will also have an impact on other IT stocks as it would largely set the trend for the sector. Stocks of Infosys are expected to bounce back from 981.55 rupees at today's close, if the company posts good results for Jan-Mar. Analysts also expect stocks of Tata Consultancy Services, another major Nifty IT constituent, to perform well as it is likely to post positive results notwithstanding the seasonal weakness of fewer working days. TCS is likely to announce its financial statement for Jan-Mar in the third week of April. Apart from the expected weak results from most domestic software services exporters, factors such as looming threat on US visa policy changes and appreciation in the rupee are seen weighing on the sector. A strong rupee against the US dollar is negative for IT companies because they get a large portion of revenue from export of services. Decision to execute Brexit in 2017 would also mount pressure on the IT stocks. Investors continue to prefer Wipro because of its better performance compared with other companies. Stocks of Wipro are likely to trade flat in the week ahead.
Source : Cogencis Information Services Ltd.