IT pack looks weak

Kapoor told CNBC-TV18, "IT looks weak at this point of time and here the major thing is rupee appreciation and it doesn’t seem that the rupee is going to depreciate very significantly from here onwards apart from some technical pullbacks, because it does appear that the RBI has changed its policy on supporting the rupee at 43-44 levels, which it did for so long obviously for inflation reasons and maybe because we are planning for full convertibility maybe a couple of years down the line and therefore IT companies are definitely going to get a hit on this."

He further added, "With a 5% appreciation of the rupee their margins could be hit by 2-2.5% and so most of them are going to find it difficult to beat their guidance’s for FY08. The only positive is that the business is very strong for most IT companies and it’s going to remain. So but even then there is a bit more downside to most of the IT companies both in the large and midcap sector and I don’t see too much of appreciation happening in the short-term."