IT shares firm up on weak rupee

Shares of nine IT companies rose by 0.09% to 3.85% at 15:08 IST on BSE after the Indian rupee fell below 65 per dollar.

Persistent Systems (up 3.85%), MphasiS (up 1.97%), MindTree (up 1.52%), Tech Mahindra (up 1.09%), Infosys (up 0.98%), Hexaware Technologies (up 0.94%), HCL Technologies (up 0.36%), Oracle Financial Services Software (up 0.09%) and Wipro (up 0.09%), edged higher. TCS was down 0.10%.

The S&P BSE IT index was up 0.80% at 12,436.86. It outperformed the Sensex, which was down 0.08% at 33,816.78.

The S&P BSE IT index had outperformed the market over the past 30 days till 21 February 2018, falling 2.39% compared with 6.35% fall in the Sensex. The IT index had also outperformed the market in past one quarter, rising 13.78% as against Sensex's 0.76% rise. The IT index had also outperformed the market in past one year, rising 20.91% as against Sensex's 17.25% rise.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 65.05, compared with its close of 64.77 during the previous trading session.

A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

The S&P BSE IT index jumped 2.20% to settle at 12,338.40 yesterday, 21 February 2018, after Nasscom reportedly issued a cautiously optimistic outlook for the Indian IT sector.

The National Association of Software and Services (Nasscom), the industry body of the Indian IT and business process management (BPM) sector, on Tuesday, 20 February 2018, reportedly said the country's IT exports could grow between 7% and 9% in 2018-2019.

R Chandrashekhar, Nasscom president, was quoted by the media as saying that Nasscom estimates a 7-9% growth rate in IT and IT-enabled services for 2018-2019. Domestic revenues may grow slightly higher at 10-12%, while exports, the mainstay, may lag in 2018-19.

Terming the industry body's views cautiously optimistic, Chandrashekhar reportedly said he hoped the export performance of the industry would be better. He said the industry might close the current financial year with a lower-than-projected 7.8% growth rate, and might touch $167 billion in revenues.

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