Prefer Infosys, TCS, HCL Tech among large caps: PINC
PINC Research has come out with its report on IT sector. The research firm has prefered Infosys, TCS and HCL Tech from large caps and NIIT Tech, MindTree and Hexaware from mid-caps.
March 10, 2012 / 13:54 IST
PINC Research has come out with its report on IT sector. The research firm has prefered Infosys, TCS and HCL Tech from large caps and NIIT Tech, MindTree and Hexaware from mid-caps.
Clients have broadly finished their budget exercise and the global macro uncertainty is likely to delay discretionary spending but thrust offshoring. The momentum in project ramp-up is expected to begin from Q1FY13. Companies have not revealed their hiring plan for the next fiscal. But the large tier firms have given a commentary to outperform the guidance. Aggressive mid-tier IT firms confident to grow above industry average. Due to soft demand environment, firms want to innovate through IP revenues and build expertise in emerging technologies like cloud computing and mobility. This will allow participation in complex and innovative deals which are incrementally growing at faster pace.A few mid-cap firms have kept the revenue growth momentum to match the higher end of the spectrum. Margin fluctuations in certain companies have been higher leading to uncertainty. The possibility of pricing increase in FY13 is low hence levers like offshoring, utilisation will come into play. Companies with good revenue growth momentum can benefit from change in employee mix. Top picks - Infosys among large caps; NIIT Tech, MindTree and Hexaware among mid-caps.Infosys is likely to benefit from improving situation in the west and expected financial stability. In FY13, no significant pressure on operating margin due to lower salary increment and stable currency compared to FY12 on an average. Maintain
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