IT Sector Revisited

It's been almost two months when Punnu started a discussion on "IT sector boom coming" here. I thought it was time to check prices again and see the lay of the land so to speak. Here are my findings:

...............20 Sep 07........7 Nov 07.......15 Nov 07
1$ = ..........Rs. 39.80 ......Rs. 39.15 ......Rs. 39.28
-----------------------------------------------------------
3IINFOTECH.....149.20 (H)......129.85 (SS)......127.75 (H)
APTECHT........388.60 (H)......358.50 (SS)......376.40 (SB)
INFOSYSTCH....1800.40 (SS)....1745.90 (SS).....1647.30 (SS)
MINDTREE.......537.10 (SS).....433.20 (SS)......447.20 (SS)
MOSERBAER......308.90 (SS).....269.05 (S).......276.40 (SB)
MPHASIS........273.00 (H)......288.00 (H).......276.50 (SS)
NIITTECH.......340.40 (S)......270.35 (SS)......250.80 (SS)
PATNI..........467.10 (H)......328.60 (SS)......313.60 (SS)
POLARIS........114.00 (S)......102.50 (SS)......105.45 (H)
ROLTA..........496.55 (SS).....696.50 (S).......713.80 (SS)
SATYAMCOMP.....421.60 (SS).....436.00 (H).......428.75 (SS)
TCS...........1002.05 (SS).....997.05 (S).......980.20 (SS)
TECHM.........1299.65 (H).....1054.25 (H)......1035.20 (SS)
TULIP..........872.40 (SS).....924.25 (H).......925.35 (SB)
WIPRO..........434.70 (SS).....477.25 (H).......457.20 (SS)

B=Buy, SB=Strong Buy, H=Hold, S=Sell, SS=Strong Sell
Recommendations as given on <link deleted>

Obviously, companies not directly affected by rupee appreciation and/or bad data coming from US/Europe seem OK by comparison as confirmed by those that have turned Strong Buys as shown above. Some like Polaris, Everonn, Wipro, TCS etc. have hit rock bottoms. I like Mindtree also which is showing some upward movement now. OTOH, Infosys may be headed lower still below 1500 (according to Elliot Waves).

I think more bad data will be coming from USA still. The sub-prime problems so far have amounted to a loss of some $150 billion but the actual size could be more like $450 billion. As our illustrious prof. Dr. Ravi Batra suggests 2008 is going to be the worst year of housing bubble. One good news according to him maybe that the Oil bubble which has been dominated by five major oil bullies may be heading lower as it was purely speculative. Actual inventories are not that low. Again, according to him Gold may be going higher still as dollar hits lower bottoms. If you do a search on his name in Google, you will hit upon a number of interesting articles and predictions by him that have come true.

Paresh

RUN WITH THE STEAM!
MY E-MAIL ID:: hi_rks@rediffmail.com ::
BUY -HOTEL LEELA & OSWAL CHEMICAL & FERT.FOR ONE WEEK.
BUY -IDBI FOR TWO DAYS.

In view of rupee turning weaker as FIIs are on selling spree and taking dollars out, here's the latest table:

...............7 Nov 07........15 Nov 07........20 Nov 07
1$ = ..........Rs. 39.15 .......Rs. 39.28 .......Rs. 39.38
------------------------------------------------------------
3IINFOTECH.....129.85 (SS)......127.75 (H).......133.95 (SB)
APTECHT........358.50 (SS)......376.40 (SB)......395.95 (SB)
INFOSYSTCH....1745.90 (SS).....1647.30 (SS).....1565.70 (SS)
MINDTREE.......433.20 (SS)......447.20 (SS)......432.05 (SS)
MOSERBAER......269.05 (S).......276.40 (SB)......276.95 (SB)
MPHASIS........288.00 (H).......276.50 (SS)......277.65 (SS)
NIITTECH.......270.35 (SS)......250.80 (SS)......240.00 (SS)
PATNI..........328.60 (SS)......313.60 (SS)......318.05 (SS)
POLARIS........102.50 (SS)......105.45 (H).......109.80 (H)
ROLTA..........696.50 (S).......713.80 (SS)......698.25 (H)
SATYAMCOMP.....436.00 (H).......428.75 (SS)......418.15 (S)
TCS............997.05 (S).......980.20 (SS)......961.35 (SS)
TECHM.........1054.25 (H)......1035.20 (SS).....1040.70 (SS)
TULIP..........924.25 (H).......925.35 (SB)......960.35 (SB)
WIPRO..........477.25 (H).......457.20 (SS)......448.30 (SS)

B=Buy, SB=Strong Buy, H=Hold, S=Sell, SS=Strong Sell

Along with AptechT, MoserBaer, Tulip, now 3iinfotech turns SB. Polaris and Rolta could also start running up as rupee depreciates further. AptechT and TulipIT volumes have gone up significantly. It seems FED has approved Dr. Ravi Batra's warnings about dollar value, and may be set to RAISE interest rate! In the long run, it may be a better for USA which is showing very storng signs of recession now. I am sure there is money in this data for us.
Paresh

can the above analysis be trusted ? will the IT stocks never bounce back ?

Sorry for not replying to your query before, but I have been away from the markets (& this forum). I am not currently tracking IT sector which I did for awhile as you can see from my posts. I have results that I stored away in January also - but they paint a gloomy picture for now.

With a weak dollar almost a certainty now, RBI has decided a wait and watch policy till after the budget announcements. But if you want my opinion, I see rupee gradually gaining strength no matter what RBI tries to do. Which would mean that our IT companies will have to increasingly look for expansion of the domestic market. The excitement is definitely gone from their shares.

This could be a challenging time, but also a time to seek out opportunities for our IT co.s. All the best.
Paresh

An interesting recent report from ABN Amro.


We expect muted volume growth in 4Q 08 even as the sharp INR fall
helps margins. Looking forward, even a conservative 16-17% FY09
EPS growth guidance from Infosys should allay concerns about the
'worst-case' demand outlook and revive interest in the sector.

Key recommendations & forecasts

(Prices at close of business 2 April 2008)

Stock	Year End	Recom	Price	Target	EPS 1fcst	PE 1fcst
Tata Consultcy¹	Mar 2008	Buy	Rs 850.85	Rs1230.00	51.78	16.4
Infosys Tech¹	Mar 2008	Buy	Rs1481.95	Rs2150.00	79.60	18.6
Wipro¹	Mar 2008	Buy	Rs 414.40	Rs 550.00	21.94	18.9
Satyam Computer¹	Mar 2008	Buy	Rs 407.25	Rs 540.00	25.20	16.2
HCL Tech¹	Jun 2008	Buy	Rs 246.75	Rs 340.00	17.52	14.1
Tech Mahindra¹*	Mar 2008	Hold	Rs 725.25	Rs1520.00	59.14	.12.3
Patni Computer¹	Dec 2008	Hold	Rs 233.50	Rs 275.00	23.72	9.8
NIIT Tech¹*	Mar 2008	Buy	Rs 105.40	Rs 423.00	23.10	4.6
KPIT Cummins¹*	Mar 2008	Hold	Rs. 76.55	Rs 140.00	7.68	10.0
HCL Infosystems¹	Jun 2008	Buy	Rs 159.95	Rs 266.00	18.78	8.5
NIIT Ltd¹*	Mar 2008	Sell	Rs. 93.80	Rs 131.00	5.09	18.4

1 - Normalised EPS - Post-goodwill amortisation and pre-exceptional items
* - Ratings and estimates are under review
Source: Company data, ABN AMRO forecasts (3 April 2008)

Paresh

From now on you can use the tag [ table] ... [ /table].
Two simple example to create new table in posts using [ table] ... [ /table].

*Note: Don't use extra space in "table" tag enclosed within "[" and "]"


Following is the table without header

A	B	C
D	E	F

Following is the table with header

H1	H2	H3
A	B	C
D	E	F

First row is the table header row which is also sortable

NOTE: IF THE HEADER ROW IS NOT VISIBLE AFTER CREATING THE TABLE AND THE REST OF THE ROWS ARE SHOWN PROPERLY THEN "REFRESH" OR "RELOAD" THE PAGE TO SEE THE CHANGES.

Thanks

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these targets that u say, how long do u think it will take.