Small IT stocks surge on hopes of good Q3 numbers

Shares of small and mid-sized information technology (IT) companies surged on Monday on hopes of good Q3 numbers based on Indian Rupee depreciation. The stocks of these companies climbed between four and 20 per cent, even as the BSE index Sensex and IT indices closed with losses. The Sensex closed at 15,814.72, down 0.2 per cent. The BSE IT index closed at 5,881.8, down 0.1 per cent.

IT giant Infosys Technologies is to announce its third quarter numbers on Thursday.

Subex Ltd gained the most at 19.4 per cent, followed by Prithvi Information Solutions, which climbed 11.5 per cent. Cambridge Solutions, Mahindra Satyam and Aptech gained about eight per cent each. Most of these counters also saw a huge spurt in volumes. See table below for more information.

Analysts attributed the rally on expectations of good results for the December quarter and narrowing of the valuation gap with frontline IT stocks. The frontline IT stocks are expected to post a good set of numbers and there are expectations that these stocks will follow suit.”

Analysts say most small companies are expected to report spectacular numbers on account of the rupee depreciation, as they leave their exposure unhedged.

“Normally, when large-sized IT companies do well, the mid-caps do better. Similarly, when the former perform badly, the latter do worse,” said an analyst with a foreign brokerage firm.

The rupee dropped 17 per cent against the dollar in 2011. During the December quarter, it fell a little more than six per cent.

Disclaimer: Information presented on this site is a guide only. It may not necessarily be correct and is not intended to be taken as financial advice nor has it been prepared with regard to the individual investment needs and objectives or financial situation of any particular person. Stock quotes are believed to be accurate and correctly dated, but www.stockmarketindian.com does not warrant or guarantee their accuracy or date.
www.stockmarketindian.com takes no responsibility for any investment decisions based on recommendations provided on website.
Financial contents like Technical charts, historical charts and quotes are taken from NSE and Yahoo sites.
Note - All quotes are delayed by 15 minutes and unless specified.

Google Adsense Ads are posted on every page of the website so visitors clicking on Ads and going to those links and carrying any financial deal is not at all related to www.stockmarketindian.com and any financial deal should be done on their own sole responsibility.
Please read at www.stockmarketindian.com/disclaimer.php before using any material or advice given at www.stockmarketindian.com
Copyright © 2006-2012 StockMarketIndian.com. All Rights Reserved