IT stocks shine at 52-week high

CHENNAI: The global recession coupled with Ramalinga Raju's Satyam scam have been taking a toll on stock prices of IT companies. But as 2009 comes to a close, almost all IT companies have seen a near doubling in their stock prices from their 52-week low. NSE databetween 2008 Christmas and this Christmas shows that Infosys hit its 52-week lowat Rs 1,065 per share, Wipro, Rs 196.50; TCS, Rs 358; HCL Tech, Rs 89.70; andCognizant's low was $17.37 on the Nasdaq. This was at a time when companies werereworking on their operational strategies, optimising costs and embarking onrationalisation measures, even sending people back home. On the backof bagging major deals from large clients in the US, share prices of thesecompanies are back ruling the roost. On Thursday, Infosys scaled a new 52-weekhigh at Rs 2,600. HCL Tech at Rs 373.30 is hovering near its annual high of Rs377. And TCS isn't too far from its peak of Rs 805 when it closed at Rs 746.80on Thursday. "There has been a general sense of improvement for the whole of the stock market when compared to last year. This is also reflecting on the IT stocks. Most of these firms are getting big orders from the US and with H1B visas also exhausted, it is showing at the bourses. Utilisation rates have also gone up among these biggies," said Ajay Parmar, head, institutional equities, Emkay Global Financial Services. With the Satyam scandal behind now, confidence levels seem to have gone up again. This euphoria is notrestricted to desi companies. IBM and Cognizant too are trading near their52-week peaks. IBM is trading at $130 against a 52-week low of $80.52, Cognizantwhich has a large India presence, is trading at $46.25 against its year low of$17.37 This is reflective of three trends: The expectations that ITspending will look up, signs that the recession has almost come to an end andgood prospects of the ERP (enterprise solutions) and consulting market.The reason why Indian companies are growing faster is that they haveunderstood how to rationalise costs while focusing on global delivery. Also, theunbundling of contracts is also playing to the advantage of the Indiancompanies, an IT analyst said.