IT stocks take it on the chin; hardly bellweather anymore

Business

oi-Sunil

By Sunil Fernandes

Published: Friday, April 13, 2012, 11:46 [IST]

Nobody in the markets ever remembers the Infosys stock tumbling almost 10% in a single trading day. Often tagged as bellweather stocks, India's IT stocks hardly exhibited bellweather type attributes today. India's second largest IT company Infosys Technologies was responsible for that.

The company disappointed the markets with poor revenue numbers and poor revenue guidance for FY 13, dragging its stock lower and the entire basket of IT stocks with it.

Despite markets trading in the green the stock of Infosys was down a staggering 9.63%, at Rs 2478.30
at 9.40 am IST. It's poor results dragged other stocks like India's number one IT company TCS (down 4%), Wipro (down 3.35%), HCL technologies ( down 2.35 %), Tech Mahindra (down 1.16%), Polaris (down 3.28%) and Mahindra Satyam (down 1%).

Shares of IT companies might recover and analysts believe that the performance from other IT companies might be much better.

The markets will now have to wait to see how the other biggies, particularly TCS and Wipro to perform. More importantly it would look for some sought of cues from these companies particularly, the working environment, pricing guidance and others.

NASSCOM has projected that the IT industry would grow between 11 and 14%. "For FY 2013, software and services growth has been forecast between 11-14 per cent in US dollar terms, while a revenue growth of $ 8-10 billion is expected,” NASSCOM Chairman Rajendra Pawar said recently.

That can be considered decent considering the tough global environment software companies are currently operating in.

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