Indian IT stocks take an upswing

Indian IT stocks take an upswing

Most of IT stocks remained among the top gainers and helped the BSE index to touch 14000 mark

Pankaj Maru

Friday, June 26, 2009

MUMBAI, INDIA: This week witnessed lots of strong movements across the IT companies mainly at the top management levels - whether it was the announcement of new heads for Tech Mahindra and Mahindra Satyam or Nandan Nilekani quiting Infosys for government projects.

Then, there were the media reports about Tata Consultancy Services (TCS) losing Rs. 225 crore e-government deal.

However, amidst such major changes in some of the top IT enterprises, the BSE IT index remained in green and overall there were gains for the investors and stockholders. The BSE index moved over 14000 mark and closed the day at 14769.67, points. And even the NSE index closed the day strongly at 4375.50 points .

The BSE IT and CNX IT index both remained in the green mark, where it was at 3375. 32 points and 3577.32 points respectively. Shares of IT majors like Wipro, Infosys, TCS went up.

According to Harit Shah, IT & Telcom analyst at Angel Broking, the Mahindra Group's announcement of CP Gurnani as Mahindra Satyam's new CEO is a welcome step and shows that they are trying to bring the business back on track.

“However for the management, the biggest challenge is how to stop customer attrition rate and also how they are going to handle this economic situation and repay the earlier losses still remains to be seen,” Shah opined.

He added that the re-branding of Satyam as Mahindra Satyam is bringing back the confidence of the investors and it is a very positive step. “They are doing the right thing at the moment.”

However, on Friday, both the Mahindra group firms stocks suffered minor losses. Tech Mahindra lost nine points and was traded at Rs.. 735.50 on BSE, while on NSE it lost over 6 points to end the day at Rs.. 737.15.

On the other hand, Mahindra Satyam was traded down at Rs..72.65 on NSE and on BSE it closed at Rs..72.45. Overall, the stocks didn't respond to the new management and failed to become investors' pick.

Interestingly, Infosys stocks were traded strongly with a nearly four percent rise in the value. On BSE, the stock was up by 69 points valued at Rs..1826.75 and on NSE it closed the day at Rs..1827.50. The stocks didn't responded to Nandan Nilekani's decision to quit Infosys.

“Infosys is a such a company that never depends on one person. The company has strong management to find the replacement of Nilekani, who has, one can say, opted for a social cause,” Shah commented.

However, Shah added that the decision could lead to business loss for the company because Nilekani's brand value in terms of his association with US clients and customers remains good. Still Infosys will continue to have seamless business even without Nilekani.

The media reports on TCS losing government deal didn't play major part on its stock price. The stocks continued to enjoy the confidence of investors and brokers as it rose by 16.55 points to close the day at Rs. 396.90, while it was traded a rupee higher at Rs.. 397.40 at the NSE.

Overall, during this week, most of the IT stocks such as Mphasis Ltd, Panti Computers Systems Ltd, NIIT Ltd, Wipro Ltd, HCL Technologies Ltd, Rotla Ltd, Financial Technologies Ltd and Oracle Financial Services Ltd remained among the top gainers on both exchanges, except a few stocks of Mahindra Group companies.

Finally a ray of light at the end of the tunnel?

©CyberMedia News

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