Shares of Indian IT outsourcing giants Infosys Ltd., HCL Technologies Ltd. and Wipro Ltd. got a boost from Donald Trump’s US election win. They will get a chance to comment on how his presidency might affect their businesses when they post earnings.
Overall, investors appear to view the incoming administration favorably for the sector, as the NSE Nifty IT Index has outperformed the broader market since the election. The president-elect’s promised tax cuts may result in businesses boosting technology expenditure. On the other hand, “America First” policies may discourage outsourcing, which the Indian companies depend on.
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“While the rate-cutting cycle has begun and uncertainty of US presidential election is over, their impact on demand improvement is likely to be visible earliest in the upcoming budget cycle of clients” in January-February, analysts at Nomura said in a note.
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US-listed peer Accenture Plc raising its revenue outlook last month showed greater deal flow from widespread generative-artificial intelligence adoption. Net hiring in the Indian IT sector also turned positive in the July-September quarter, analysts at PL Capital said, suggesting companies were preparing for better order inflows.
Further east, Taiwan Semiconductor Manufacturing Co. may also need to address geopolitical risks such as potential US tariffs or restrictions affecting its China business, Morgan Stanley said.
Country Garden Holdings Co. will post earnings for full-year 2023 and the first half of 2024 after delays. The distressed developer earlier proposed new terms with key banks to slash debt and borrowing costs, aiming to reduce debt by up to $11.6 billion.
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