The significant fall in Indian currency against the US dollar creating a demand environment in the US and European markets which is directly benefits the Indian IT companies. It is quite encouraging for top IT players.
If the trend continues, which directly create impact to information technology firms which will not be able to secure the currency benefit March quarter. basically it has been a period of muted growth since clients are going for deciding information technology budgets.
In the mid-term economic growth recovery the investors worried about the adverse impact of software services exporter profitability due to stong rupees funds in cyclical stocks.
There is biggest reduction in of all the midcap IT companies MindTree, NIIT Tech, Hexaware and Persistent have seen the biggest reduction in discount to Tier-I IT while Polaris and MphasiS have seen their discount gap widening due to lower revenue growth according to brokerage.
The US economic expansion is increased with the expenditure over a information technology at higher rate. US GDP growth is increased by 4 % In forth quarter and 3.4 in third. It is positive sign towards maintaining of tech expansion to spend IT which was up to 3.6%.
The most preferred companies that have lower risk profile and ability to drive growth by virtue of differentiation. We focused to Buy on Persistent Systems and KPIT Technologies, retain SELL on Hexaware, and downgrade MindTree to SELL. We initiate NIIT Tech with Buy and eClerx Services with SELL. We retain BUY on Polaris, NEUTRAL on MphasiS," the report said.
The Top most India's software services IT firms, including TCSBSE 0.10 %, InfosysBSE -7.38 %, and HCL Technologies BSE -0.18 %, have shown a persistent momentum in bagging new contracts over the past few quarters. "A buoyant demand environment and traction in the digital space compel us to raise our target multiples along with rolling over to FY16 estimates,BSE 2.15 % Research in a recent report.
ReplyDeleteAsia opens mostly flat after latest North Korea missile test; China, US, UK markets shut for holidays.capitalstars