IT firms see greener stock prices

BANGALORE, INDIA: As the dates of annual results advent, the stock exchange see gradual rise in the stock prices, especially for the IT companies like TCS, Infosys, Wipro, MindTree, HCL etc.

This is perhaps the first year-end results after the downturn, and the performance of the companies regarding volume, demand, client requirements will set the mood of the preceding year.

According to Ravi Kumar from Acumen Group, the market is bullish that can be seen with visible rise in the stock prices. He said, “Weak rupee against foreign exchange (forex) and return of market demand are expected to improve the company earnings, hence rising the stock prices.”

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Ravi elaborated that the performance of a company depends largely on the forex. For companies like Infosys, Wipro that earn substantial revenue from US and Europe respectively, the weaker rupee can fetch huge revenues considering the billion dollar deals.

He added, “The recovery in European economy would play a significant role in improving the balance sheet, especially for Wipro as they get a large chunk of business from the region and the retarded economic growth was affecting the topline so far.”

According to current price movement in NSE, the entire IT stock prices (in last 30 days) has moved up by 6.47 per cent. While TCS saw a rise of 10.5 per cent, HCL technologies was up 7.57 per cent and HCL Infosystems up 7.52 per cent. Wipro gained 2.32 per cent, while Infosys was up 5.7 per cent and Mindtree gained 2.12 per cent. On the other hand, Tech Mahindra has a negative growth of 0.54 per cent.

Given the trends, the stock prices are largely ruled by market speculation and it is usually after the results, when the prices come down. Last quarter, in the month of January the prices of Infosys dropped by 5 per cent on BSE and 6 per cent on Nasdaq.

The company, however, regained the momentum over the past few months with the announcement like Infosys 3.0 and internal restructuring and the expected appointment of new CEO, COO and CFO.

The upcoming results will decide whether it is still viable to buy or sell them, as also the share of other IT majors