Credit Suisse has raised its rating for the Indian software industry to 'overweight' and lowered that on capital goods to 'underweight' as it expects export-focused industries to drive economic growth.
The continuing weakness of the Indian rupee because of an increase in capital outflows and the high cash flows may find favour with investors, the Swiss Bank said in a report. "The key differentiating factors we believe are a weaker rupee, low financial leverage and their under-appreciated low operating leverage," the Swiss bank said in its research report. "Given the firms' high-quality management, with strong track records and a focus on profits, we expect the sector to gain favour with investors, at least relatively, despite the weak demand environment." A slowing of India's investment-led growth may weigh on the capital goods sector, even as regulators lower interest rates and free up liquidity, said Credit Suisse, explaining the rationale for dowgrading the sector. "The producers of the large infrastructure projects could delay and cancel many projects, irrespective of the funding availability, because of the need to reduce their own overall leverage," it said. Software was previously ranked 'underweight' while capital goods were rated 'market weight' by the bank. Infosys Technologies Ltd., Tata Consultancy Services and Wipro Ltd. have been assigned an 'outperform' rating by Credit Suisse analysts Nilesh Jasani, Arya Sen and Deepak Ramineedi who authored the report. They have a 'neutral' rating on Thermax Ltd. and Crompton Greaves and an 'underperform' rating for Cummins India. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
