Infosys, HCL Assess Business Outlook Under Trump
Shares of major Indian IT outsourcing firms, including Infosys Ltd., HCL Technologies Ltd., and Wipro Ltd., gained after Donald Trump was elected US president. The companies are likely to outline how the Trump presidency may affect their business when they announce their quarterly results.
Investor sentiment seems bullish for the sector as the NSE Nifty IT Index has outperformed the broader market since the election results. Technology spending by businesses may increase under the promised tax cuts of Trump. However, his 'America First' policies could be an issue for Indian companies dependent on outsourcing, which would be discouraged under his administration.
Analysts at Nomura said that even though the rate-cutting cycle is in place and election uncertainties have dissipated, the impact on demand may not be felt until the budget cycle for clients, which falls in January-February. Accenture Plc, a US-listed peer, had last month raised its revenue outlook, citing an increase in deals driven by the adoption of generative artificial intelligence. In addition, net hiring by the Indian IT sector picked up in the July-September quarter as companies appeared better placed to ride stronger order flows.
Rival Tata Consultancy Services also maintained a positive tone on higher client spending, although it posted earnings below analysts' estimates. For its part, Taiwan Semiconductor Manufacturing Co. risks geopolitical risks: US tariffs or restrictions that might impact its Chinese business.
In other news, Country Garden Holdings Co. will report earnings for 2023 and the first half of 2024 after a series of delays. The distressed Chinese developer has proposed new debt restructuring terms, but a key group of bondholders has yet to agree to the changes.
