Infosys, TCS enjoy best prospects to deliver growth outperformance

Overall our price targets for 5 top-tier companies rise by 2-10%, as a result of the changes.
Infosys best placed near-term, on both growth & margin.

Our recent meetings with Infosys & Wipro and channel checks suggest a mixed picture with rising risks in BFSI but continued overall deal momentum for select companies. Benefit of recent INR-USD depreciation will be offset to some extent by cross ccy headwinds. We expect continued divergent growth across companies with Infosys best placed in the near term. Amidst our positive stance towards IT services as a relative defensive, TCS & TechM are our other Buys.

Infosys best placed near-term, on both growth & margin

We maintain near-term visibility is best for Infosys amongst top-tier companies given its strong deal win momentum. We expect revenue growth for FY20e to surprise positively at 11.5% y-o-y constant ccy vs. its latest guidance of 8.5-10%. This implies 11% y-o-y growth for rest of FY20e. Despite visible margin pressures across companies in Q1, we also expect Infosys’ FY20e Ebit margin to meet the mid-point of its guided range at 22%, implying 22.5% for rest of FY20e.


Adjusting estimates, PT for ccy & other factors

We adjust our estimates to factor in weaker INR vs. USD but stronger cross currency headwinds. We temper our growth expectations for FY20e in some cases to reflect rising macro risks. We also introduce FY22e estimates and roll forward our price targets. We raise valuation multiple for Infosys as we expect its discount to TCS to narrow. Overall our price targets for 5 top-tier companies rise by 2-10%, as a result of the changes.

Infosys, TCS remain preferred picks

We maintain our positive stance on Indian IT services as a relative defensive. TCS & Infosys remain our preferred picks as we believe these are best placed to deliver growth outperformance, which should also drive better margin defence. We believe risk-reward is favourable for Tech Mahindra given improving communications outlook – recent large AT&T deal will add. Despite its recent deal win momentum, we maintain Hold on HCL Tech given risks from high inorganic contribution. Maintain U/P on Wipro given consistent growth underperformance.

Source: https://www.financialexpress.com/market/infosys-tcs-enjoy-best-prospects-to-deliver-growth-outperformance/1705843/

US tech firms dominate top 10 green card application list

Pune: Only two Indian companies —Tata Consultancy Services and Infosys — figure in a list of the top ten applicants for employer green cards in the six months to March 2019, a review of US government data shows.
US-based technology companies such as Amazon, Cognizant, Cisco, Facebook and Google have together filed more green card applications, or those seeking talented immigrants with permanent residency to work in their offices in the United States, according to the US Department of Labor data.
The Department of Labor follows an October to September calendar year.
Amazon has filed 1,500 applications, the largest among the ten companies. Cognizant Technology Services, a US-headquartered IT services firm that has a large employee base in India, is second with more than 1,300 employer green card applications, followed by Cisco. TCS, with 1,009 applications comes fourth on that list, while Infosys is in seventh position, according to the data. It is as yet unclear how many of these applications will convert into permanent residency permits.
Amazon, Cisco, TCS, Infosys, Google, Facebook, Microsoft, Apple and Deloitte — all of which figure in the top 10 — declined to comment.
A spokesperson for Cognizant said it consistently sponsors employees in “securing legal permanent residence in the US precisely because they are highly-skilled, highly-educated knowledge professionals who are valuable assets to our company and clients.”
The National Association of Software and Services Companies (Nasscom), the industry lobby group for Indian IT, said the data supports its contention that there is a shortage of skilled talent in the US and that American companies are hiring people from where it is available the most —India. “While it is a company’s decision on how it wants to recruit and retain talent, this is a reflection of the talent shortage with low unemployment rates and an increased demand for digital skills,” said Shivendra Singh, vice-president of the global trade department at Nasscom.
US grants H-1B visas to highly skilled people for a period of three years. This can be extended for a similar term. Most workers apply for a green card or permanent resident status towards the end of their H-1B visa tenure.

The application enables them to stay and work in the US legally while it is in process.
Companies are required to pay for a worker’s H-1B visa application, but the responsibility for a green card rests with the individual. However, many companies apply for an I-140 or Immigrant Petition for Alien Worker to retain a highly valued or skilled resource.
A prospective employer submits the Form I-140 to the United States Citizenship and Immigration Services (USCIS) to petition for an alien to work in the US on a permanent basis.
Currently, it takes an Indian applicant more than eight years to receive permanent resident status. It is estimated that up to 300,000 Indians could benefit if the Fairness for High-Skilled Immigrants Act or HR 1044 is passed by the US Senate. 

Source: //economictimes.indiatimes.com/articleshow/70562546.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst