Lower Guidance - a buying Opportunity .. .

Networth Stock Broking does a pre-quarter result check on IT companies and suggests a buy on dips on frontline techs and a few niche players.

EPS Growth guidance to be lower compared to last year

 As Q4FY05 tech results are in the offing, we believe that more emphasis would be on the outlook for FY06. The expectations are high following the thunder performances in FY05 with the tier-I companies expected to report more than 40% growth for the year ended March 05. However for FY06 the growth rates are expected to return to normal growth rates due to the base effect and hence would not positively surprise investors to trigger a fresh rally. We expect prices of tier-I IT companies to adjust to these growth rates. We believe that valuations are still attractive on a Price to Growth (PEG) basis. We recommend investors to use every dip in prices as a buying opportunity.

Click here to download the entire report