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IT sector not bogged down by budget blues
Information technology sector is the second top most gainer amongst sectors like automobile, consumer durables, FMCG, healthcare, metal and oil, in the period between March 5 and 13. IT sector has gained by 6.47%.
Information technology sector is the second top most gainer amongst sectors like automobile, consumer durables, FMCG, healthcare, metal and oil, in the period between March 5 and 13. IT sector has gained by 6.47%.
The recently listed IT companies like MindTree Consulting , which have been making news with the way its stock price is beefing up, is 116.82% up from its issue price( as of yesterday). The stock has gained 45.52% in the last three trading sessions(Feb12-14). Other newly listed companies like Firstsource Solutions which got listed in February is 11.95% up from its issue price(as of yesterday). Tanla Solutions is up 10.23%( as of yesterday). The company got listed in January.
Talking about the stock, R Sreesankar, said, "Analysts were saying that it probably quoting at 40 times forward earnings but I am equally surprised at the strength that I have seen in the counter. Looks like that some of those investors who probably haven't got an allocation, got into it big time."
In the last three trading sessions(Feb 12-14), stocks like Lanco Global , Zen Technologies , Tera Software , Teledata Info , Aftek , are few midcap IT companies that have made to the list of stocks that have beefed up gains. They have gained by 32.89%, 16.43%, 15.60%, 15.44%, 12.19% respectively.
The midcap IT companies seem to have overcome the budget proposal hurdle. IT companies got worried when the FM decided to levy MAT of 11.22% of their adjusted book profits, fringe benefit tax (FBT) on employee stock option plans (ESOPs), dividend distribution tax and levy service tax on commercial leased space.
Analysts were expecting the midcap and smallcap IT companies to be the worst hit as largecap IT companies are already paying tax over 11.33%.
They expected companies smallcap and midcap companies such as Mastek, Aztec, MphasiS, Cranes, iGate too be impacted as their effective tax rates are between 5-10%.
Infact, a day after the budget, midcap and smallcap IT companies were not as much hit as it was expected. Stocks like 3i Infotech, Sasken, Lanco Global, Zensar Tech, Cranes Software, Zen Technologies were up by 4.39%, 2.83%, 1.14%, 1.06%, 1%, 0.08% respectively. And even if stocks lost, the loss was minimal. Stocks like iGate Global fell by 1.19%, Sonata Software- 1.33%, Geometric Software- 1.89% etc.
