This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Infosys Rides Tech Spending Strength

SAN FRANCISCO -- Investors are showing renewed enthusiasm for one of India's flagship tech services giants, Infosys (INFY - Get Report), ahead of what is expected to be a strong earnings report late Wednesday.

The company's shares recently climbed about 1.5% to $54.86, on top of a gain of more than 3% Tuesday, as traders turned their focus to strong demand for tech support services, rather than profit headwinds like India's appreciating currency.

Early indications suggest that spending on IT services remains healthy. In late September, Accenture (ACN - Get Report) reported 23% revenue growth, in local currency terms. Robust sales growth in Europe gave investors hope that these regions can help offset an economic slowdown in the U.S., outsourcers' largest market. IT service providers have also indicated that they have been able to phase in price increases.

What's more, business from Infosys' largest customer bases has far outpaced overall market growth. In the last quarter, revenue grew 39% from financial services clients, 32% for manufacturing clients and 75% from telecom clients.

In light of the favorable outlook, Ashish Thadhani of Gilford Securities believes that Infosys' stock is retuning to a reasonable valuation after investor fears led to excessive selling. Gilford doesn't have an investment banking relationship with the company.

In past months, investors lost confidence that Indian outsourcers could sustain their profit growth and competitiveness in the face of double-digit wage gains for Indian IT employees and a nearly 12% year-to-date appreciation of the rupee, India's currency, against the U.S. dollar. Infosys shares remain about 10% below their 52-week highs.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
EDS $1.34 0.75%
ACN $103.11 0.00%
IBM $161.99 0.00%
INFY $16.91 0.00%
AAPL $121.30 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs