The Hindu Business Line : Rupee impact: Bluechip IT stocks slump 7-14% in Jan-June

New Delhi June 21 Reeling under the impact of appreciating rupee, the share price of bluechip IT stocks such as Tata Consultancy Services, Infosys, Wipro and Satyam Computer Services have slumped between 7 per cent and 14 per cent since early-January.

The share price of the country's largest software exporter, TCS, has fallen by over 8 per cent on the BSE, while Infosys and Wipro have lost 14 per cent and 14.6 per cent, respectively.

In stark contrast, the country's fifth largest software exporter HCL Technologies saw its shares rising 5.7per cent on the BSE during this period. Bucking the overall trend in frontline IT stocks, HCL Technologies shares closed at Rs 337.20 on June 20 against a price of Rs 318.7 per share on January 2.

`Massive appreciation'

"The fall in IT scrips have been primarily on account of massive rupee appreciation. The rupee has appreciated from Rs 44.29 to a dollar in beginning of January to Rs 40.75 now. That means an 8 per cent appreciation, which has in turn led to a correction in stocks. Considering that a one per cent appreciation in rupee reduces margins by 30-40 basis points, an 8 per cent rise, can have a margin impact of 2-4 per cent," Mr Ashwin Mehta, senior research analyst at Ambit Capital said.

Data on share price movement of these IT stocks shows that TCS shares fell from early January level of Rs 1,248.5 to close at Rs 1,145.80 on June 20. Infosys has dropped from Rs 2,272.45 in January to Rs 1,954.10 now. Wipro, which has seen the maximum drop, quoted at Rs 521.75 on Wednesday against the January-level of Rs 611.50 on the BSE, while Satyam Computer Service slipped 7.18 per cent to Rs 471.80 on June 20.

"HCL Technologies, on the other hand, has been re-rated, as the company has consistently performed in the last few quarters. The market realises that the company's strategy to play in uncontested space is working," an analyst with Brics Securities said.

More Stories on : Software | Stocks | Forex | Infosys Technologies Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Cyclone alert for AP coast

External borrowings becoming more expensive

Air Deccan board to decide on shedding stake to UB

Cabinet allows Mittal to pick up 49% stake in Bhatinda refinery

Central Drug Administration to become reality soon

Finolex Ind in deal with Tishman Speyer for land sale

Rupee impact: Bluechip IT stocks slump 7-14% in Jan-June

e-passport: TCS looks for major global contracts

Cabinet nod for additional 30 lakh tonnes sugar buffer

SEBI to consider proposal on investor protection fund on June 30

Order buzz lifts Educomp

WTO sets up panel on India's wine duties