Date:08/07/2006 URL: http://www.thehindubusinessline.com/2006/07/08/stories/2006070803511500.htm

Back IT: Betting on Re depreciation

Analysts expect strong quarterly figures from a number of IT companies, although some of them expect EBITDA margins to decline to some extent. Salary hikes in April, which certain players had brought about, may impact margins as well.

Currency depreciation will play a role on this front, it is also felt. Incidentally, the rupee depreciated by 2.5 per cent QoQ against the US dollar and 6-7 per cent against euro and pound. While the sector may continue to face supply concerns, decent volume growth is expected. Some of the larger MNCs are likely to step up investment in India.

Analysts also point out that the movement of the IT index has not been quite in sync with that of the Sensex. While the Sensex gained 7.72 per cent during the last one month, the BSE TECk index outperformed it by gaining 8.05 per cent. Today, the Sensex declined 2.40 per cent against 2.14 per cent drop of TECk index.

Nilanjan Dey