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
TheStreet Open House

Infosys Rides Tech Spending Strength

SAN FRANCISCO -- Investors are showing renewed enthusiasm for one of India's flagship tech services giants, Infosys (INFY), 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) 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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs