The earning season in the US has been very good given the circumstances and there will be increase in the IT spend too rest of the year. The logic that it is cheaper to invest more on IT than in human resources and increasing the hiring has been working. The output increase for dollar spent is significant.This would only see an increase in the IT spend. The European market too has been recovering fast enough for the IT spend to increase significantly.
The big league players like Infosys , TCS, Wipro, Tech Mahindra and HCL Tech have also significantly ramped up there operations to cash in this opportunity.HCL Tech has been the big story last year and we could see it continuing this, rest of this year too. TCS, will meet its targets and the quarter 4 will be the result to look out for, when it would have ensured that the grip on the market has increased and it will be difficult to dislodge .
Infosy's is still a hazy picture.The two quarters since the return of Nayanamurthy has been good, but the acid test will be the coming fourth quarter. The long term plans put in by him should now either work or going off the rails.The effect of the new team in place should be showing some sort of result too.If the gamble pays off then we good see this company soaring too.The target for the share is 4k by the next quarter result whether it will sustain and move forward, is dependent on the result it comes out with in the next quarter.
TCS will move at its steady pace and will improve their dollar values this time around.The move to buy back its shares is it in offing? Market noise do suggest this but then we need to wait and see it happen to believe it.This would certainly take the value or the price of the share to INFOSY's levels quickly, nevertheless we could see it reaching or crossing 2400 levels soon enough or even 2500 levels before the next quarter results.
WIPRO would remain in the consolidation phase, for the time being and the results of the next quarter would see it going higher provided it does meet its own targets.Doing so would not be a big challenge in these markets.We will not see significant up move on the stock till the next quarter results do come out.The stock would maximum touch 700 and come back to settle below 650 levels.
HCL TECH, now the rumour of it's imminent sale drives the price up and makes it harder for the potential buyer, a victim of it's own success? This does not necessarily be a reflection on the way the company operates or the profitability it generates. The value of the share would soon come close to what Tech Mahindra is at currently .It will remain the choice of investors for some time to come and it is not showing any sign of getting weak or faltering.
Tech Mahindra, is lying dormant and it needs some sort of boost soon enough or it will begin to languish and later deteriorate which will see investors moving out of this counter.There needs to be some sort of awakening and see this company do exceptionally well in the fourth quarter, this would see the share value jump and see it in the 2000 rupees level.Failing which it will drift down to 1500 to 1400 level soon.
Have attached a file which does give an outlook too from NASCOMS view point with the larger India picture in focus.