Shares of Tata Consultancy Services and Infosys hit 52-week highs on the bourses today on expectations of higher growth in 2013.
Analysts say the general optimism in the IT industry — stemming from hopes of higher outsourcing spends by clients, improved economic activity in the US and a depreciating rupee — is elevating the scrips’ of India’s software services majors.
TCS shares were up 2.1 per cent, to close at Rs 1590.4, while Infosys ended higher by by 1.22 per cent (or Rs 115) at Rs 3,004.75 on the Bombay Stock Exchange. The S&P BSE IT Index was up 1.66 per cent and ended the trading session at Rs 6,968.74.
The Infosys counter has been abuzz with buying activity ever since it announced better than expected results for the December quarter (net profit up by 33.3 per cent on revenue growth of 30.8 per cent). Moreover, Infosys raised its full-year guidance for earnings, contrary to expectations of a reduction.
As a result, the shares have risen by 26 per cent since third-quarter results were announced January 12.
TCS, on its part, has been outperforming its peers for several quarters now.
The street expects US-based clients to benefit from improved economic activity, resulting in their increasing offshoring budgets for 2013, Dharmesh Pancholi, an analyst with Sharekhan Securities, said.
This augurs well for Indian IT vendors such as TCS and Infosys, which derive the majority of their revenues from the US.