IT Sector Revisited

Dear paresh,
I have edited the table in your last post to match the new standard. Hope u would like it.
You can also edit ur post to see what change I made to create that table.

If u r copying and pasting the table from another site .... then I have a few tips for u...

1. Just paste the table into the notepad and enclose it with the table tag like
[ table]Your_pasted_text[ /table] (*don't use space after [ )

You can optionally create a header row by writing table="head" in the bracket.

2. now seperate each column with | and an enter for every row.

3. After doing it copy the entire notepad text and paste it into the forum post...

4. Important Note: Firstly all the columns in the table must be same (If it is not so then make it by writing smthng in it like I wrote "stock" column in the first column in your table and secondly the first row should start immediately after [ table] tag.

Bye

These are for Long Term investors only. To me that means holding for a year at least. Please see elsewhere a discussion on Boom-and-Gloom cycle theories.

Admin, thanks for explaining how to post tabular data. I like what you've done to my post.

Paresh

STOCK	17 Mar 08	31 Mar 08	02 Apr 08	25 Apr 08
1$ =	Rs. 40.65	Rs. 39.88	Rs. 39.955	Rs. 40.17
Nifty	4503.10	4734.50	4820.00	4999.85
3IINFOTECH (70 - 164)	91.25	98.90	100.35 (H)	118.40 (SB)
APTECHT (133 - 450)	167.25	222.10	210.40 (H)	252.25 (H)
INFOSYSTCH (1255 - 2156)	1337.80	1439.90	1482.80 (SB)	1684.30 (SB)
MINDTREE (290 - 837)	333.95	335.10	345.00 (SS)	450.65 (H)
MOSERBAER (119 - 345)	138.25	152.15	159.30 (H)	179.15 (S)
MPHASIS (150 - 341)	175.75	201.75	197.20 (SB)	228.25 (S)
NIITTECH (85 - 425)	95.40	101.90	105.35 (H)	131.05 (H)
PATNI (170 - 599)	197.25	222.30	235.90 (H)	250.30 (SS)
POLARIS (62 - 200)	74.65	78.60	79.95 (H)	100.80 (SB)
ROLTA (200 - 396)	265.40	261.35	270.35 (SB)	329.00 (SB)
SATYAMCOMP (305 - 523)	366.35	396.35	408.40 (H)	444.70 (H)
TCS (725 - 1330)	791.85	810.45	851.25 (SB)	889.30 (SS)
TECHM (575 - 1729)	620.30	705.25	725.45 (H)	812.55 (SS)
TULIP (662 - 1168)	953.15	855.40	843.05 (SS)	858.45 (H)
WIPRO (324 - 635)	354.10	432.10	415.25 (H)	466.35 (SB)

As expected, Rupee has done its trick. All the stocks in the table have shown appreciation, with most doing quite well. The Dollar is looking weaker today so there may be a few more days before you can book short term profit. On a cautionary note, this month may hold a nasty surprise still since global cues are weak and Indian conditions are a bit worrisome.

Paresh

After some major favourable policy announcements from RBI (CRR hike of 25 basis points only and no change in any key rates, more favourable in overseas investments by Indian companies) and Govt. (STPI tax policy extended one more year, duty cuts, leeway on infra finance etc.) tremendously buoyed the market sentiment. Satyam, Infosys shot up. Small and Medium IT co.s will benefit from continuing tax structure (from next financial year though their tax will go up to 20-22% from current 10-12%). Rupee turned distinctly weak to 1$=Rs. 40.465. All these bodes point towards better IT stock prices IN THE SHORT TERM.

Still weaker global cues, and slowing US economy as indicated by continuing bad economic data flow on a daily basis will take its toll. Which is why I feel when Sensex is around 17,800 one must remain vigilant to book profits and pick up your stocks later when things stabilise. Alternatively, one can remain invested and be prepared to buy full 100% later when Sensex seems bottomed out. CAUTION and VIGILANCE is the order of the day.

Paresh

STOCK	17 Mar 08	31 Mar 08	02 Apr 08	25 Apr 08	08 May 08
1$ =	Rs. 40.65	Rs. 39.88	Rs. 39.955	Rs. 40.17	Rs. 41.76
Nifty	4503.10	4734.50	4820.00	4999.85	5081.70
3IINFOTECH (70 - 164)	91.25	98.90	100.35	118.40 (SB)	127.05 (H)
APTECHT (133 - 450)	167.25	222.10	210.40	252.25 (H)	246.35 (SS)
INFOSYSTCH (1255 - 2142)	1337.80	1439.90	1482.80	1684.30 (SB)	1784.65 (SB)
MINDTREE (290 - 834)	333.95	335.10	345.00	450.65 (H)	471.90 (SS)
MOSERBAER (119 - 345)	138.25	152.15	159.30	179.15 (S)	191.35 (H)
MPHASIS (150 - 336)	175.75	201.75	197.20	228.25 (S)	219.70 (SS)
NIITTECH (85 - 425)	95.40	101.90	105.35	131.05 (H)	144.90 (H)
PATNI (170 - 599)	197.25	222.30	235.90	250.30 (SS)	271.35 (SB)
POLARIS (62 - 177)	74.65	78.60	79.95	100.80 (SB)	107.00 (SB)
ROLTA (200 - 396)	265.40	261.35	270.35	329.00 (SB)	311.60 (S)
SATYAMCOMP (305 - 523)	366.35	396.35	408.40	444.70 (H)	471.70 (H)
TCS (720 - 1290)	791.85	810.45	851.25	889.30 (SS)	947.00 (H)
TECHM (575 - 1590)	620.30	705.25	725.45	812.55 (SS)	934.25 (SS)
TULIP (662 - 1168)	953.15	855.40	843.05	858.45 (H)	940.30 (H)
WIPRO (324 - 627)	354.10	432.10	415.25	466.35 (SB)	496.70 (SB)

Awhile back, we expected Rs. to hit 42 levels and it has just about reached that level. As NIFTY reversed from 5200 levels, the growth in IT share values has slowed down as seen above. Some have distinctly turned SS. This is a trader's market, and if you're a short-term trader then you might want to book profits. Long-term investors may look to buy more when (AND IF) the market tanks. Sensex may NOT bottom out at 14677 this time.

The next few weeks are crucial, but by mid-June the scenario should be clearer. Oil has also almost hit its MINIMUM target of $127. I hear that it may go to $150 levels. That could bring major crisis of confidence. Some more disasters in financial space may mark entry into the last of the Boom-and-Gloom cycle. And who knows how long with that last!?! Time to sit on cash, and watch (or take evasive action).

Paresh

From KOTAK's Technology Sector Overview on 20 May, 2008

Company	Rating	16-May	Target
TCS	REDUCE	981	950
Wipro	ADD	506	490
Infosys	BUY	1,871	1,800
Satyam Comp	BUY	487	500
HCL Tech	REDUCE	296	260
i-flex solutions	SELL	1,403	1,100
Patni	SELL	281	270
Hexaware	SELL	67	70
Polaris Software	SELL	110	85
Tech Mahindra	ADD	957	900
Mphasis BFL	SELL	246	200
MindTree	BUY	455	480

STOCK	31 Mar 08	02 Apr 08	25 Apr 08	08 May 08	24 May 08
1$ =	Rs. 39.88	Rs. 39.955	Rs. 40.17	Rs. 41.76	Rs. 42.70
Nifty	4734.50	4820.00	4999.85	5081.70	4946.55
3IINFOTECH (70 - 162)	98.90	100.35	118.40	127.05	123.65 (SS)
APTECHT (133 - 450)	222.10	210.40	252.25	246.35	238.30 (SS)
INFOSYSTCH (1255 - 2142)	1439.90	1482.80	1684.30	1784.65	1828.75 (S)
MINDTREE (290 - 834)	335.10	345.00	450.65	471.90	470.75 (H)
MOSERBAER (119 - 345)	152.15	159.30	179.15	191.35	182.20 (SS)
MPHASIS (150 - 336)	201.75	197.20	228.25	219.70	232.65 (SS)
NIITTECH (85 - 425)	101.90	105.35	131.05	144.90	155.60 (H)
PATNI (170 - 599)	222.30	235.90	250.30	271.35	275.90 (SS)
POLARIS (62 - 175)	78.60	79.95	100.80	107.00	104.90 (SS)
ROLTA (200 - 396)	261.35	270.35	329.00	311.60	299.25 (S)
SATYAMCOMP (305 - 523)	396.35	408.40	444.70	471.70	482.50 (H)
TCS (720 - 1262)	810.45	851.25	889.30	947.00	932.40 (S)
TECHM (575 - 1590)	705.25	725.45	812.55	934.25	829.30 (SS)
TULIP (662 - 1168)	855.40	843.05	858.45	940.30	983.85 (H)
WIPRO (324 - 627)	432.10	415.25	466.35	496.70	481.10 (SS)

(52 wk low-high in parentheses)
(numbers and short term calls - buzzingstocks (dot) com)
B=Buy, SB=Strong Buy, H=Hold, S=Sell, SS=Strong Sell

Crude hitting $135 and going up, inflation staying put at nearly 8% (revised figures WILL be higher as they always are) etc. is adding up to the woes of all sectors. Even with dollar value being high at nearly Rs. 43, it's not helping IT sector share values. As is seen above most counters are indicating Sell positions for the SHORT TERM. The markets seem destined to continue to move sideways in a band for some months. The Sensex projection at the end of fiscal 08-09, i.e. by 31 March 2009 is 19000.

Paresh

Contrary to my expectations IT sector turned strong on rupee depreciating very rapidly. However, Indian rupee was knocked off early highs on Monday as the sharemarket tumbled on worries of a rift in the ruling coalition, raising concerns about foreigners selling investments and repatriating their holdings.

Rupee ended at 42.40/41 per dollar as against Friday's close of 42.45/46.

Paresh

With US $ taking a severe beating on a/c of bad unemployment data, US spec money went to gold and oil which surged to all-time high of $139. In India, inflation worries, political unstability and current account deficit is likely to result in tightening monetary conditions by RBI and lower GDP growth (could be below 8%) now.

So while IT and Healthcare sectors performed valiantly recently on depreciating rupee, I believe this to be a short term phenomenon. US is in a recession (no matter how you slice and twist it) and that is bound to affect the profitability of IT sector. Already the average salary hike has come to single digit figures. And a slowdown in IT is evident in Real Estate too.

One silver lining could be that US efforts to work its way thru the credit crunch etc. may start paying off by September 2008. Let us see which way the ball bounces till then..

Paresh

I am surprised at how soon our expectations have come true. IT took a beating along with the markets, and with US going down everyday, who cares about $-Rs. value anymore? See the table below for yourself, friends.

STOCK	31 Mar 08	02 Apr 08	25 Apr 08	08 May 08	24 May 08	24 Jun 08
1$ =	Rs. 39.88	Rs. 39.955	Rs. 40.17	Rs. 41.76	Rs. 42.70	Rs. 42.94
Nifty	4734.50	4820.00	4999.85	5081.70	4946.55	4191.10
3IINFOTECH (70 - 162)	98.90	100.35	118.40	127.05	123.65	104.45 (SS)
APTECHT (133 - 450)	222.10	210.40	252.25	246.35	238.30	200.10 (SS)
INFOSYSTCH (1255 - 2142)	1439.90	1482.80	1684.30	1784.65	1828.75	1794.45 (H)
MINDTREE (290 - 804)	335.10	345.00	450.65	471.90	470.75	423.85 (SS)
MOSERBAER (119 - 345)	152.15	159.30	179.15	191.35	182.20	140.15 (H)
MPHASIS (150 - 336)	201.75	197.20	228.25	219.70	232.65	230.15 (H)
NIITTECH (85 - 409)	101.90	105.35	131.05	144.90	155.60	128.05 (S)
PATNI (170 - 550)	222.30	235.90	250.30	271.35	275.90	237.50 (H)
POLARIS (62 - 158)	78.60	79.95	100.80	107.00	104.90	81.05 (SS)
ROLTA (200 - 396)	261.35	270.35	329.00	311.60	299.25	281.65 (SS)
SATYAMCOMP (305 - 542)	396.35	408.40	444.70	471.70	482.50	453.35 (SS)
TCS (720 - 1262)	810.45	851.25	889.30	947.00	932.40	844.40 (SS)
TECHM (575 - 1550)	705.25	725.45	812.55	934.25	829.30	756.50 (SS)
TULIP (662 - 1168)	855.40	843.05	858.45	940.30	983.85	1048.40 (SS)
WIPRO (324 - 552)	432.10	415.25	466.35	496.70	481.10	470.15 (SS)

(52 wk low-high in parentheses)
(numbers and short term calls - buzzingstocks (dot) com)
B=Buy, SB=Strong Buy, H=Hold, S=Sell, SS=Strong Sell

Azim Premji of Wipro has taken a cut in his salary sending a clear picture of what's to come. Euro IT market has been a tough nut to crack. I have double-checked the values above including 52-wk low-highs which in some cases have been revised downwards as the time frame has shifted (something I've always done even before but noting here fyi). The picture, I am afraid, is quite gloomy. If one holds IT shares, they need to be patient to see better valuations. Everything depends now on how the US economy performs in the coming months, and how our IT sector adapts to huge domestic demand for computerization (which in turn depends on how well our govt. is able to protect their Intellectual Property Rights IPRs). Too many IFs & BUTs in my opinion.