Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India IT Services
And now Gartner raises its IT
spending forecast for 2011
from +5.6% yoy to +7.1% yoy
Gartner’s improved IT spending expectations add to
our conviction in our Street-high 26-27% yoy
US$ revenue growth forecast for large IT vendors
Infosys (OW) and TCS (EW).
Gartner has further raised its worldwide IT spending
forecast to +7.1% yoy in 2011… That’s up from +5.6%
yoy in April and +5.1% yoy at the beginning of the year.
Worldwide IT spending increased by 5.9% yoy in 2010
as per Gartner estimates. Gartner expects global IT
services spending to accelerate in 2011 to US$846bn
(+6.6% yoy) compared to +3.1% yoy in 2010.
…despite macro uncertainty over the last six
months: The increase in tech spending forecasts by
Gartner comes at a time when U.S. GDP forecasts have
inched down over the last six months. The drivers are
better spending expectations for hardware (+7%
change), Enterprise software (+5.6% change) and IT
services (+3.4% change) over the last six months.
IT services spending continues to move up: Gartner
forecasts spending growth for the Hardware, Enterprise,
Services and Telecom segments. Hardware at +11.7%
yoy is expected to be the fastest-growing segment,
whereas IT Services is the only segment where yoy
growth rates are projected to double – from 3.1% yoy in
2010 to 6.6% yoy in 2011.
Maintain In-line Industry view: We expect consensus
revenue growth expectations (~22% yoy) to inch closer
to our expectations (26-27% yoy) in coming quarters.
Infosys and HCLT are the two key Overweights in
our coverage universe; we believe not all stocks are
likely to benefit equally in FY12e. Given the steep
increase in tax rates and margin pressures due to wage
hikes, visa charges and expected onsite investments in
hiring – EPS growth for most players is likely to lag
revenue growth significantly in FY12e.
Stretched valuations keep us on the sidelines for TCS:
Even though we expect strong 26% yoy revenue growth,
management transition and associated changes are likely to
keep near-/medium-term revenue growth below its larger peers.
We think a better entry opportunity is likely to arise.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India IT Services
And now Gartner raises its IT
spending forecast for 2011
from +5.6% yoy to +7.1% yoy
Gartner’s improved IT spending expectations add to
our conviction in our Street-high 26-27% yoy
US$ revenue growth forecast for large IT vendors
Infosys (OW) and TCS (EW).
Gartner has further raised its worldwide IT spending
forecast to +7.1% yoy in 2011… That’s up from +5.6%
yoy in April and +5.1% yoy at the beginning of the year.
Worldwide IT spending increased by 5.9% yoy in 2010
as per Gartner estimates. Gartner expects global IT
services spending to accelerate in 2011 to US$846bn
(+6.6% yoy) compared to +3.1% yoy in 2010.
…despite macro uncertainty over the last six
months: The increase in tech spending forecasts by
Gartner comes at a time when U.S. GDP forecasts have
inched down over the last six months. The drivers are
better spending expectations for hardware (+7%
change), Enterprise software (+5.6% change) and IT
services (+3.4% change) over the last six months.
IT services spending continues to move up: Gartner
forecasts spending growth for the Hardware, Enterprise,
Services and Telecom segments. Hardware at +11.7%
yoy is expected to be the fastest-growing segment,
whereas IT Services is the only segment where yoy
growth rates are projected to double – from 3.1% yoy in
2010 to 6.6% yoy in 2011.
Maintain In-line Industry view: We expect consensus
revenue growth expectations (~22% yoy) to inch closer
to our expectations (26-27% yoy) in coming quarters.
Infosys and HCLT are the two key Overweights in
our coverage universe; we believe not all stocks are
likely to benefit equally in FY12e. Given the steep
increase in tax rates and margin pressures due to wage
hikes, visa charges and expected onsite investments in
hiring – EPS growth for most players is likely to lag
revenue growth significantly in FY12e.
Stretched valuations keep us on the sidelines for TCS:
Even though we expect strong 26% yoy revenue growth,
management transition and associated changes are likely to
keep near-/medium-term revenue growth below its larger peers.
We think a better entry opportunity is likely to arise.
No comments:
Post a Comment