Increasing Taxes Should Keep India's IT Biggies at Bay (INFY, WIT)

by: Himanshu Pandya did an interview with Karvy stock analyst R. Ravi. Ravi believes that all the Indian IT companies will have to pay higher taxes. Furthermore, he believes that the effective tax rate provisioning for the industry, which has been hovering between 10-12 per cent, will definitely shoot up to around 16-18 per cent.

He adds that for Infosys (NASDAQ:INFY), he is expecting revenues to grow by 8.8 per cent and that its profit at reported levels should be around 7.1 per cent. In the case of Wipro (NYSE:WIT), he expects their IT and ITES revenues to grow healthily, close to 7 per cent and for TCS, he is expecting the topline to grow by around 8.5 per cent.

Ravi added, "If you look at tier one, I [feel] quite positive on all the stocks whether it is Infosys, TCS or Wipro."

On HCL and Satyam (SAY), Ravi has an "out-perform rating" and on Patni (NYSE:PTI-OLD), he has a "buy" rating. But he also thinks the tax shots will keep the investors at bay at this point in time (source: Rediff).

Indian IT 1-yr comparison chart:

Indian IT comparison chart

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