July 1: With the first quarter of FY11 just over, markets have now started looking ahead to Q1 results. Technology major Infosys will be the first major player off the mark as usual, on July 13. There are some positive expectations from the Indian IT biggies this time, as results of US firms indicate that tech spending is recovering. The negative impact of the Eurozone crisis is expected to be limited.
Accenture and Oracle have reported strong May end quarter results, says HSBC. “Strong management and technology consulting is a robust indicator of companies investing for future growth,” says the brokerage. This should be positive for Indian IT, according to the research house. Infosys and HCL Tech are the preferred picks of the broker amongst the larger Indian firms.
Accenture’s Q3 results show a broad based recovery, says Macquarie. The company has reported a 6-8 per cent growth across all major segments. This kind of growth hasn’t been seen since August 2008, the brokerage says. Accenture has also bagged five deals of over $100 million, which indicates that spending is returning to the sector. Similar announcements could be expected for Indian firms. One segment that has done particularly well is financial sector services. Amongst Indian firms, TCS has a large exposure to this category, which Macquarie says is the top pick in the segment. HCL is another favoured name.
One worry for the tech sector so far has been expected weakness in the British pound and the Euro. However, the fall in the rupee has helped mitigate the near term concerns.
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