IT Stocks Outlook: 30.07.2012 - 03.08.2012
Stocks of major information technology firms are likely to
see stock-specific movement next week, based on Apr-Jun earnings announced
by these companies. HCL Technologies, which posted a robust year-on-year
growth for Apr-Jun, rose nearly 8% this week and may continue the trend in
the coming week as well. Strong on-year growth of 37.7% in revenues at
59.19 bln rupees coupled with tighter control on costs helped the
Delhi-based IT major beat Street expectations of its June quarter earnings
by a yawning gap. The company reported a 67.3% on-year jump in quarterly
net profit to 8.54 bln rupees. Infosys and Wipro, which disappointed
investors with poor earnings for Apr-Jun, are likely to continue seeing
lack of investor interest next week. This week, stocks of Infosys and Wipro
declined 3% and 8%, respectively.
Tuesday, Wipro posted a lower-than-expected net profit for
Apr-Jun, and shared a tepid guidance for Jul-Sep, on the back of delays in
decision-making by clients, and order closures. The soaps-to-software major
posted a 6.7% sequential growth in consolidated net profit for Apr-Jun at
15.80 bln rupees. Wipro's 2QFY13 (Jul-Sep) US dollar revenue guidance of
0.3-2.3% QoQ (quarter-on-quarter) growth was poor and, in absolute terms,
is the third successive quarter that the IT major has given the exact same
dollar revenue guidance, implying no growth momentum whatsoever. In our
view, this guidance is likely to lead to the stock continuing to get a
short shrift from investors.
By RUPEE DESK [email protected]
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