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Morgan Stanley Sees Mixed Results From Indian Tech Cos

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Morgan Stanley expects mixed June-quarter results from the top four Indian tech companies, with muted revenue guidance but a steep EPS upside.
The companies: Tata Consultancy Services, Infosys, Wipro and HCL Technologies.

The investment bank says uncertainty post June-quarter results would be an opportunity to accumulate stocks with low expectations and modest valuations, such as Infosys, HCL Technologies and Mindtree.

Shares are trading lower on recent weak economic data in the US, which is the biggest outsourcing market for Indian IT firms, and recent gains in rupee, which is at a 1-1/2 month high, are also weighing, traders say.

A firm rupee adversely affects operating profit margins of IT firms as the sector derives a major part of its revenue from exports.

Tata Consultancy Services fell 2.13 per cent, Infosys declined 0.5 per cent while Wipro lost 0.21 per cent.