Infosys, TCS, Wipro our top picks in IT: Antique Broking

Infosys surprised the street with better-than-expected results for the third quarter. In an interview to CNBC-TV18, Pratish Krishnan, IT analyst at Antique Broking says Infosys have maintained the revenue guidance and that has been a big surprise for the quarter.

Also read: Infosys Q3 net profit seen down 5% QoQ, USD revenue up 4%

He further says that Infosys will be his top pick followed by TCS and Wipro. "My sense is that a lot of clients are still underweight on the technology sector," he added.

Below is the edited transcript of his interview to CNBC-TV18

Q: Have you upped your estimates for FY13 and more importantly FY14 now after seeing what Infosys had to report today?

A: We still have to do detailed numbers. However, given that they are seeing a pricing uptick during the quarter even in the offshore side, it seems that there could be some upside to our numbers. Currently, for FY14, we are at around Rs 180 in terms of EPS. That clearly should see some upside going forward.

Q: Amongst all the internals that you looked at, what was the standout feature of Infy's performance this quarter?

A: Given that December is seasonally weak quarter and there were a couple of headwinds in the quarter, the performance has been quite better. They have done almost 2 percent volume growth. Pricing has gone up substantially. So, all these things have really kicked in very well. The good part is that they have maintained the revenue guidance. The street was looking at downside to the 5 percent guidance. That has been a big surprise for the quarter.

Q: Volume growth is still just about 2 percent. Is the street reacting to the numbers? Is 2 percent volume growth something to cheer about?

A: For the December quarter, it is probably better. My sense is that a lot of clients are at a much subdued growth for the quarter, given that the management commentary during the quarter was for certain ramp-downs. We also had issues in terms of Sandy storm. In that sense, probably 2 percent is still better.

Q: What's your pecking order right now amongst the top four—TCS, Infosys, HCL Tech, and Wipro? Do you think it is likely going to change now?

A: We had Infosys as a top pick followed by TCS and Wipro. Probably that will remain the same. My sense is that a lot of clients are still underweight on the technology sector. That probably should see some upside. However, we need to review the target prices given the huge upside that we have seen today. We need to finalise that.