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INFORMATION TECHNOLOGY
We expect companies under our coverage to report a strong performance on
the revenue front. The industry is seeing strong demand trends as
developed economies, especially USA, recover further. Cross currency
benefits should have a negative impact to the extent of 50-80bps. Margins
are expected to be maintained QoQ as the benefits from rupee depreciation
and SG&A leverage are offset by salary hikes by select companies and
seasonal variations.
We understand that, over the quarter, the overall demand scenario has
remained stable / improved across sectors. The US economy has continued
to show signs of improvement. While European economic growth in EU
remains challenged, deeper penetration into clients and challenges on
revenues / costs of clients are leading to higher outsourcing from that
region, we understand. TCS has already indicated that, growth should be in
line with its expectations. The new strategic vision to be laid down by
Infosys as well as any revision to Infosys' FY15 guidance will be closely
watched.
We maintain our constructive view on the medium-to-long term prospects
of the sector on expectations of improving demand over this period. The
Rupee has depreciated over the past few weeks and has provided tailwinds
to the sector. However, we believe that, the probability of a significant
depreciation from the current levels is low.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
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INFORMATION TECHNOLOGY
We expect companies under our coverage to report a strong performance on
the revenue front. The industry is seeing strong demand trends as
developed economies, especially USA, recover further. Cross currency
benefits should have a negative impact to the extent of 50-80bps. Margins
are expected to be maintained QoQ as the benefits from rupee depreciation
and SG&A leverage are offset by salary hikes by select companies and
seasonal variations.
We understand that, over the quarter, the overall demand scenario has
remained stable / improved across sectors. The US economy has continued
to show signs of improvement. While European economic growth in EU
remains challenged, deeper penetration into clients and challenges on
revenues / costs of clients are leading to higher outsourcing from that
region, we understand. TCS has already indicated that, growth should be in
line with its expectations. The new strategic vision to be laid down by
Infosys as well as any revision to Infosys' FY15 guidance will be closely
watched.
We maintain our constructive view on the medium-to-long term prospects
of the sector on expectations of improving demand over this period. The
Rupee has depreciated over the past few weeks and has provided tailwinds
to the sector. However, we believe that, the probability of a significant
depreciation from the current levels is low.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://www.kotaksecurities.com/pdf/dmb/MorningInsight01102014dp.pdf
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