India’s Infosys, HCL Set To Address Business Outlook Under Trump Presidency

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.

“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. 

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.

Highlights to look out for:

Saturday: Avenue Supermarts (DMART IN) is projected to post 19% profit growth. Its shares rallied after it said third-quarter revenue grew 17%, easing concern about competition from the newly burgeoning quick commerce sector. Analysts at Motilal Oswal said the revenue figure implies more favorable unit economics at its supermarkets. 

Monday: HCL Technologies' (HCLT IN) software business should power sequential growth as the IT business suffered from seasonal furloughs. Analysts at Nuvama expect the company to upgrade its full-year services revenue forecast to 4% to 5%, from 3.5% to 5% earlier. 

Tuesday: Country Garden (2007 HK) likely recorded further losses in delayed full-year 2023. It reached an understanding with a coordination committee, which comprises seven banks that are long-term business partners of the group for its restructuring. The embattled developer is relying on a turnaround in sales to reassure debt holders, although it also expects fewer home completions this year. 

Thursday: Infosys' (INFO IN) constant-currency revenue growth probably reached 6.3% thanks to the financial services segment, which saw better discretionary outlays, Bloomberg Intelligence said. A less severe effect from seasonal furloughs may help margins expand from a year ago. Moneycontrol reported the company had deferred annual salary hikes to the January-March quarter. PL Capital expects Infosys to marginally raise full-year revenue guidance.

• TSMC's (2330 TT) fourth-quarter net income likely rose 55%, estimates show, as demand for its N3 and N5 nodes for AI and smartphone production remain strong. The semiconductor giant may provide conservative guidance for its 2025 sales growth and likely over-deliver later, Morgan Stanley said.

• Reliance Industries' (RELIANCE IN) quarterly profit should rise 9.7% lifted by the telecom unit Jio's price hikes. Refining margins should improve sequentially, analysts at PL Capital said, amid rising product cracks. Watch for comments relating to its streaming services business, as its Disney JV was completed last quarter.

Friday: Wipro (WPRO IN) is projected to post little-changed revenue because of weakness in the Americas and furloughs. Strategic initiatives from Wipro's new management will be in focus, analysts at Motilal Oswal said.

• Tech Mahindra's (TECHM IN) third-quarter profit probably more than doubled thanks to cost efforts. Revenue growth may have been held back by persistent weakness in the telecommunications vertical, Elara Capital said in a report.