Financial services firm Morgan Stanley has turned its outlook on the Indian information technology sector to ‘cautious’ slashing target price for various IT companies. Morgan Stanley has downgraded shares of Tata Consultancy Services and slashed target price to Rs 1,920 from Rs 2,260. Price target for HCL Technologies has been cut by 25% to Rs 905. However the firm has upgraded Infosys and raised target price to Rs 775 from Rs 759. Tech Mahindra is Morgan Stanley's top large cap pick, but target price on that too, has been trimmed to Rs 830 from Rs 880.
Infosys share price today surged as much as 3% to Rs 705 after India’s second-largest software exporter raised its sales forecast for the year ending March 2019. The company raised its revenue forecast to 9% from the earlier estimated 8%. Infosys also announced its second share buyback programme for 10.32 crore shares at Rs 800 per share. The first buyback was held in December 2017. A company can hold a share repurchase programme only once in 12 months. Infosys also declared a special dividend of Rs 4 per share.
Five of the top-10 most valued firms together added Rs 43,689.89 crore in market valuation for the week ended Friday. The gainers were ITC, HDFC, Infosys, SBI and ICICI Bank, while Reliance Industries Ltd (RIL), TCS, HDFC Bank, HUL and Kotak Mahindra Bank suffered losses in their market cap. ITC gained Rs 17,94173 crore followed by ICICI Bank with Rs 8,378.07 crore and HDFC Rs 2,837.12 crore. TCS lost Rs 12,007.63 crore. RIL was India’s most valued company followed by TCS, HDFC Bank, HUL, ITC, HDFC, Infosys, SBI, ICICI Bank and Kotak Mahindra Bank.
IT major Infosys on Friday reported a 29.6% fall in its net profit at Rs 3,610 crore for the third quarter ended December against a net profit of Rs 5,129 crore a year ago. Analysts had estimated a net profit of Rs 4,131 crore, according to Reuters. The Infosys board approved a share buyback of Rs 8,260 crore at a price of Rs 800 per share. The company also declared a special dividend of Rs 4 per equity share and fixed January 25, 2019 as record date for the special dividend and January 28, 2019 as the payment date.
IT major Infosys on Monday said that the company board would consider proposals including share buyback, payment of special dividend and the proposal to implement capital allocation policy on its meeting scheduled on January 11. Infosys will also announce its third quarter results on January 11, 2019.
Economic slowdown in the US might hurt India $167 billion information technology sector outsourcing industry. Experts fear Fortune 1000 companies may cut spending on technology, hurting Tata Consultancy Services Ltd (TCS), Infosys Ltd and Wipro Ltd. Economists at Morgan Stanley expect the US to grow at 2.3% in the current year, down from an estimated 2.9% growth in 2018. US accounts for bulk of business, between 55% and 70% for the five largest Indian IT companies, including TCS, Infosys, HCL Technologies Ltd, Wipro and Tech Mahindra.