India’s information technology services businesses will continue to benefit from improving client demand from developed countries in 2014, pushing stocks higher after a stellar performance last year, analysts told India Insight.
India’s No. 1 IT services exporter Tata Consultancy Services (TCS) and its rival Infosys beat analysts’ expectations in their financial results that were released earlier this month. They also raised their sales growth forecasts on signs of improving economies in the United States and Europe.
“In Europe we are gaining market share; in U.S. things are looking up – that will drive discretionary and new technology spends,” said Kuldeep Koul, IT-sector analyst at ICICI Securities. “What’s also helping the industry … is the fact that the rupee continues to remain at very benign levels.”
Global IT spending worldwide is expected to rise more than 5 percent this year, according to research firm International Data Corporation, while Gartner expects spending to grow 3.1 percent to $3.8 trillion.
The BSE IT index rose nearly 60 percent in 2013 on signs of a global economic recovery and a weak rupee which helped boost earnings. Stocks such as TCS rose 73 percent while Infosys rose 50 percent.