Seven software shares rose 0.05% to 3.15% at 11:25 IST on BSE on upbeat earnings and forecast from Accenture PLC, the world’s second-largest technology consulting company.
HCL Technologies (up 3.15%), Infosys (up 1.55%), MphasiS (up 1.23%), Wipro (up 0.72%), TCS (up 0.60%), Mahindra Satyam (up 0.35%) and Tech Mahindra (up 0.05%), rose.
The BSE IT index was up 1.19% at 5,246.11. It outperformed the Sensex, which was down 0.79% at 16,393.71.
The BSE IT index had outperformed the market over the past one month until 27 September 2011, gaining 9.84% compared with the Sensex’s 4.26% gain. The index had underperformed the market in past one quarter, sliding 13.85% as against 10.26% decline in the Sensex.
Accenture PLC, the world’s second-largest technology consulting company, on Tuesday, 27 September 2011, reported fourth-quarter profit that exceeded analysts’ estimates on increasing spending by businesses. Accenture also gave 2012 forecasts exceeding projections.
Another trigger for the latest upmove in IT stocks was weak rupee. The partially convertible rupee was at 49.1550/1650 per dollar, weaker than Tuesday’s close of 49.065/075. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion’s share of revenue from exports.
IT sector bellwether Infosys will declare its Q2 September 2011 results on 12 October 2011. According to CRISIL, IT services providers are expected to report buoyant revenue growth of around 17% in Q2 September 2011 on the back of strong pipeline. However, EBITDA margins are likely to decline by around 200 bps due to rising salary costs, CRISIL says.
Infosys executive co-chairman S. Gopalakrishnan on 8 September 2011 said clients are unlikely to cut their technology budgets for 2011, though they may end up cutting them for next year. He also warned that clients may hold back spending budgets earmarked for this year. Infosys had earlier said that it is witnessing delays in decision-making by clients.
TCS on Tuesday, 13 September 2011, said the demand for outsourcing technology services continues to be good, although economic uncertainties in Europe remain the biggest concern for the technology major. TCS is cautiously optimistic about the demand for outsourcing services as clients remain wary of spending in an uncertain economic environment, S. Ramadorai, vice chairman, said in a media interview. Ramadorai’s comments come amid fears of a growth slowdown in India’s technology companies amid the ongoing debt crisis in Europe and a slowdown in the US–the two main outsourcing markets.
The National Association of Software and Services Companies, or Nasscom, the main software trade body on 23 August 2011 reiterated its estimate of the industry recording 16%-18% growth in export revenue this fiscal year. Nasscom had in February 2011 forecast the industry’s export revenue at $68 billion-$70 billion for the fiscal year that started on 1 April 2011. Nasscom has reiterated estimate of growth in export revenue this fiscal year despite fears of economic troubles in the main outsourcing markets viz. the US and Europe.
Source:http://www.indiainfoline.com/Markets/News/IT-shares-in-demand-on-upbeat-forecast-from-Accenture/3951345937
