Morgan Stanley expects mixed results from top IT cos

Morgan Stanley expects mixed June-quarter results from the top four Indian tech companies-Tata Consultancy Services, Infosys, Wipro and HCL Technologies-, with muted revenue guidance but a steep EPS upside.

The investment bank says uncertainty post June-quarter results would be an opportunity to accumulate stocks with low expectations and modest valuations, such as Infosys, HCL Technologies and Mindtree.

[caption id=“attachment_365476” align=“alignleft” width=“380” caption=“Reuters”] [/caption]

Shares are trading lower on recent weak economic data in the US, which is the biggest outsourcing market for Indian IT firms, and recent gains in rupee, which is at a 1-1/2 month high, are also weighing, traders say.

A firm rupee adversely affects operating profit margins of IT firms as the sector derives a major part of its revenue from exports.

Tata Consultancy Services fell 2.13 percent, Infosys declined 0.5 percent while Wipro lost 0.21 percent.

Reuters