HCL Infosystems rallied by more than 14% in the morning trade on Tuesday after signing distributor agreement with Apple on Monday. The stock was trading at Rs 50.25 on NSE. The news comes as a relief to the shareholders, as the stock has lost a quarter of it’s value in the year. In the last one month, the stock has posted negative returns of 16%. In comparison, the BSE Small Cap index is up by 28% since January 2017. The year hasn’t been good for it stocks, as the BSE Teck Index has posted paltry returns of 2% in the year so far. In the last one month, the Index has lost 4%.
Yesterday, HCL Infosystems announced that it has signed a distributor agreement with Apple for iPhones and other products in India. In a BSE filing the company said,”We wish to inform that the Distributor Agreement for distribution of iPhone and other Apple products has been signed with M/s Apple India Private Limited (M/s Apple), a confirmation of which is received by the Company from M/s Apple today.”
HCL, a strong player in the space, already distributes mobile phones of Lenovo, Motorola and Nokia among others. A partnership with the company is also expected to be beneficial to Apple as it will enhance its presence in more Indian cities.
Sharing its outlook for the sector going forward, CLSA pointed out that IT has become a low growth sector, and investors should not expect double digit growth going forward. The S&P BSE IT index has lost more than 4% in the last one month. CLSA predicts that the growth will be 6-8% going forward. The firm advised the investors against holding on to IT stocks for a period of more than 3 years.