There are a number of stocks in India that could see business volatility in the coming years, following the election of US President Donald Trump. Here are a few stocks that could be hit.
Sun Pharma gets its largest amount of revenue from the United States. India's biggest pharma company may see an impact if policy in the US tighten. Donald Trump has said that he plans to bring back drug industries to the US. "We are the largest buyer of drugs in the world, and yet, we do not bid properly," he said. Recently, he also pointed out that "pharma companies were getting away with murder". Sun Pharma may see some business being affected if Trump goes ahead with key policy decisions.
TCS is India's largest IT company and again gets bulk of its revenues from IT services provided in the US. A number of things are likely to impact business. It is now believed that outsourcing of jobs by US firms is going to be increasingly difficult. Earlier in Jan, US Congressmen had reintroduced a bill that aims to raise the H1B salary benchmark from $60,000 to a minimum of $100,000 to be able to work in America. This could increase the costs and put margins under pressure for IT companies in India, like TCS. They would now be be forced to hire locally from the US. Check stock quote of TCS here
Lupin Ltd is another stock that gets a chunk of its revenues from the US. Like Sun Pharma this stock also has fallen in the last few weeks following the victory of Donald Trump as the US President. Getting pharma jobs back into the US through incentivizing setting-up of the industry there, could affect business interests of companies like Lupin.Stringent practices on drug quality has already resulted in business impact for many companies. It is going to be tough times for the industry.
Infosys is another stock that you should keep an eye on during Trump's Presidency. The company has already lowered its revenue guidance as business conditions become increasingly tough. The reintroduction of the H1B salary pay hike to $100,000 is certain to hit margins of companies, as Infosys and the other biggies look to hire tech professionals in the US locally.
Client spends are also reducing and margins are coming under pressure. It is going to be a tough few quarters for the IT industry. Check Infosys stock quote here
Wipro like Infosys and TCS gets a bulk of revenues from the US. This company could also see revenues, margins and hence profitability being adversely affected due to protectionist policies there. Things should become abundantly clear in the next few quarters at most IT companies. It would be a surprise to see IT stocks rallying in the net few days.
The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article. The author and his family do not own any shares in the above mentioned stocks.