Archive for the 'IT Sector' Category

Market Matrix of IT Sector as on 25 Feb 2008

February 25, 2008

By krsna Khandelwal – A veteran market analyst

Friends,

IT sector saw the heady days in 2000 when its discounting at 95 PE and made me then particularly uneasy . It was the handy work of Ketan Parikh and the story is well known to you all. The same IT sector has now been given a discounting of just 8 PE. Its share in total market capitalisation has come down to 11% from the high level of 25%. This is when the IT companies have been seeing an steady rise in profits and top line as well. In the process this sector has become one of the ordinary sectors and has hardly any risk if invested in. Only point of caution to be exercised it to keep company of the leading companies. In fact the leading companies have been investing in real estate over all these years in order to house their expanding work force , both for work and for living. This investment itself has appreciated in real value terms due to astronomical rise in the value of real estate in the cities where they have their major presence. This may be seen as an stabilising factor for these companies and works as entry barrier for the new entrants. The sector still has lot of room for growth. So, three cheers for IT sector.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

HCLTECH @ 265 as on 6 Feb 08 after q3 results

February 7, 2008

HCLTECH @ 265 (06/02/08) gets 954 panch-tattva points and may be bought on declines for long term.

Previous Recommendations:

@605(22/12/06) :975-You may get out of this on surges without looking back.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix: Current Economic News Analysis

January 9, 2008

By krsna Khandelwal – A veteran market analyst

Friends,

Information Technology Department has drawn mega-city plans which are identified as investment regions for hardware an software companies.Land acquisition and development of the region will be done by the states. The IT sector is preferred child of govt , no doubt.

Govt suggested to oil PSUs to issue bonus shares who have in turn declined to do so on the pretext of under-recoveries which will make it difficult to maintain yield post bonus issue. Both parties are have reasons but I have many a times brought before you the requirement of a firm predetermined policy regarding oil pricing rather than whimsically acting in that direction. This is one area that should be immediately paid attention to.

IOC want govt to raise petrol prices by Rs 8-9 per litre to meet Rs 120 cr deficit per day, a tall order either way. In West Bengal , petrol at refinery gate is Rs 20.39 per litre while motorists have to pay Rs 46.86 per litre at pumps.

Singur is abuzz with activity and the Tata Motors would change the face of region without doubt and would establish West Bengal back as an important automobile manufacturing state.

Four Indian banks , namely, SBI,ICICI,BOB and BOI have to book mark to market losses for exposure in US Sub-Prime securities. BOB has however clarified that it may not have to do it.

Licensing for banks may be done away with in India . RBI says there is now no need for it as the banks are opening branches in rural and semi-urban area on their own initiative. The license free regime for the banks will be hotting up competition in profitable centres and thereby will affect profitability of banks.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix: IT Sector and BRIC nations

December 14, 2007

By krsna Khandelwal – A veteran market analyst

Friends,

Most of the incremental demand is coming from BRIC and more particularly from India and China in respect of commodities and manufactured goods. Now, IT sector would also be seeing demand for IT services coming from these two countries. The point is that India may take care of its own needs, what about China. Will it have to look towards Indian IT firms for its IT solutions. Indian IT firms have to find means to serve these two nations and also be able to set right their dollar related problems.

It should be IT next and I think accumulation is going for the pace in IT stock trading is very gainful.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix: Economic News and Market Analysis as on 28 Nov 2007

November 28, 2007

By krsna Khandelwal – A veteran market analyst

Friends,

Limited Partnership Bill would soon be cleared. This is a step in right direction and would open possibilities of partnership between people with common business vision but no personal history of mutual trust. Another important feature is that the stepping in shoes of outgoing partner would be easier and the continuity of business will not break.

RPL share price movement has been such as to give rise to doubt of manipulation. Price went up in a frenzied manner and than came down to under 200/- per share after scaling high of beyond 290/- in a short time. The Reliance management sold off big chunks at an average price of around 230/- per share and enriched the company by over Rs. 3000 crs. There has been enrichment of some at the cost gullible investors. I expect the price to touch still lower levels before the production starts.

Dedicated eastern and western freight corridors would entail investments of over Rs.28000 crs and the plan has been given a green signal by the cabinet. Eastern corridor will take about five years to complete and would begin at Ludhiana and pass through Saharanpur, Khurja and Allahabad in U.P. The western corridor would cover the distance between JNP (Mumbai) and Delhi. On completion, a useful link in fast movement of goods will be established.

ONGC would have to absorb Rs.7448 crs of subsidy burden during first half of current accounting year. The jump in the crude oil prices by about $6.67 per bbl translates in to $1.88 per bbl gain to ONGC (roughly by 28%).

RBI governor says that any disorderly adjustment in global financial markets will result in sharp rise in interest rates. The local banks would face greater threat of defaults in loan portfolios.

FM says that the state owned banks will not be allowed to have lower than 51% holding by the govt. and this poses a problem fore the banks to get adequate funding while the expansion business takes place. This needs to be amended in an era where the competition etc has gone up and the funding requirements of the banks has increased enormously.

Some 2.22 million D-Mat accounts have been frozen in India for want of PAN particulars. I think there is case for defreezing these accounts; however, as an incentive to give the PAN numbers some extra charges may be levied up to the time the PAN particulars are supplied. Further, the transfer of the holding may be allowed in to an account, which has the PAN particulars.

Income Tax dept. want a levy in shape of ‘Capital Transaction Tax’ on property deals based on circle rates to take care of under reporting of the value of transactions. As per an estimate 40%, payment in these transactions is settled through cash payment out side of books. In 2006-07, the number of real estate deals worth over Rs.30 Lacs went up by 40% to 109000 transactions across India.

The attrition rates in IT sector is climbing inspite of measures by the companies to keep it in check.

Today Nifty closed at 5617 after the slide for the second consecutive day. This is after a surge in US markets yesterday and has actually not shown a linkage with the world markets after a long time. The month of December will be seeing the liquidity tighten due to last but one advance tax installment for the accounting year 07-08. It may now be expected that the range bound trading in stocks will have downward bias at least till the end of December.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market