The country’s largest IT services exporter, TCS touched its lifetime high of Rs 1,143.40 on the Bombay Stock Exchange (BSE) on Thursday, while rival Infosys Technologies hit its 52 week high of Rs 3,296. IT industry analysts have attributed the surge in IT stock prices to a sound global business environment, a strengthening US dollar and expectation of better IT budgets for next year.
Srishti Anand, IT analyst, Angel Broking, told FE, ?Global hues are pointing towards good business. IT is insulated from all the domestic noise on 2G and other scams, as these firms are dependent largely on overseas clients, and this has worked in favour of the software stocks.?
TCS has performed ?extremely well? compared to Infosys Technologies in terms of margins, volume growth and people management, analysts said. ?In the last six quarters, TCS’ average volume growth hovered around 6.3% compared to 4.4% of Infosys. TCS’ margins have improved significantly in the last few quarters,? said Sanjeev Hota, senior research analyst, Sharekhan. ?TCS have been able to cash in on BFSI, one of its strongest revenue generating verticals. In the medium term we see TCS doing well,? he said.
Another IT bellwether, Wipro, also registered a jump of 2.7% to close at Rs 469.80 on the BSE on Thursday. Analysts say there is an increasing optimism that IT budgets, to be drawn up during the January-February period, will be better than expected. ?We are seeing that across verticals clients are keen on incresing IT budgets to reduce operational costs,? Hota added.
The BSE IT index grew 9.6% during the last three months, higher than all other sectoral indices including power, realty, banks, auto and metals. In the same period the Sensex rose 3%. The BSE IT index went up 4.3% in the last one month compared to a 1.8% fall in the Sensex.