India tech groups stand prepared for painful surprises

India tech groups stand prepared for painful surprises

Financial times reports

Indian IT outsourcers have proved to be resilient in the latest round of first-quarter earnings in spite of the global financial crisis and a scandal at Satyam Computer Services that had threatened the industry’s reputation.

Tata Consultancy Services, Infosys Technologies and Wipro, the three biggest IT services exporters, reported better than expected profits and have outperformed the market. Their shares have risen between 80 per cent and 122 per cent this year.

But many analysts believe their stocks, which have a forward price/earnings ratio of about 17-19 times earnings, are overvalued and question whether the industry will be able to sustain further growth.

Statements by top IT executives suggest that they, too, are worried in spite of the strong results.

Sharing unbiased information for the small investor

Is the Indian market in a bubble or is the India growth story real ? Are stocks manipulated by market operators ? Hows does a small investor in India benefit from the economic growth the country is going thru without getting swindled by the big stock market manipulators and FII's. Is TV news to be trusted ? There are a zillion analysts on TV giving their opinions. How many times have their stock calls been correct ?

I thought maybe a collective discussion will help alleviate some of the uncertainity one faces when facing the formidable market. Most small investors seem to enter the market at the peak and exit the market at the bottom, vowing never to return, only to repeat their mistakes time and again. Its time to lose our naivity and invest like pros.

It will hard to beat the big guns but if we can educate ourselves of the pitfalls of investing and stop investing blindly, the market will return the favor with an average return higher then what we have achieved in the past. Is that too lofty of goal for this blog ?