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Tuesday, December 13, 2005

[Foreign]The Next Big Economy Powerhouse - India

The BRIC Nations - Brazil, Russia, India and China have gained the spotlight as the emerging economic locomotives in the 21 century and have drawn investment away from the traditional G8 - Canada, France, Germany, Italy, Japan, the United Kingdom the United States of America, and Russia. After covering China in the previous article, it should be interesting to look another emerging mega-market from Asia's Economic Twin Towers - India.

With a
significant drop in poverty rate and strong economic growth last year - 6.1%, third fastest behind China(8.8%) and Russia(8%), India is now bringing more opportunites to the investors instead of risk. With the collaboration rescue effort with long time rival Pakistan in Kashmir on October, 2005, the biggest investment risk seems to be eased. Now it seems to be a good time to invest in India.

Cheap labor? No. Not just that. Actually India is so rich with talent in industry such as Information Technology that giant software firms such as
IBM has established development centers there. IBM and its Global Serivce Unit, focusing on IT outsourcing, has been getting profits every year by moving IT works from US to low cost yet high talent pool such as India.

Since IT outsourcing is one of India's major business, as a investor, you will want to take a look at the following big IT India based outsourcing firms when you want to invest in India.

  • Infosys Technology (INFY): the Bangalore based consulting and IT services company has total of 36,800 employees worldwide in North America, Europe and Asia-Pacific region. The revenue has increased 50% every year in from 2003 to 2005 based on the recent income statement with net income almost doubled every year around the same period. The stock is trading at the 52 week high of $77 per share and should be going strong as the stock price is trading above both 50 and 200 day moving average.
  • Wipro Ltd. (WIT): rivalry to Infosys providing IT consulting and outsourcing services with sales locations in United States, France, Germany, Holland, Japan, Sweden and United Kingdom. The Bangalore based IT service firm has total of 46,500, more than Infosys and is generating close to 2 billions in revenue as recorded on March this year, 300 millions more than Infosys. However the stock is trading at $11 per share and should be expected to go strong entering the new year.

Besides the IT outsourcing powerhouse, the following India based companys should also be doing well in terms of stock price entering the year 2006.

  • Tata Motors (TTM): Mumbai based commercial vehicle producers focusing on affordable automobiles. It is basically the GM or Ford of India. With the decreasing in poverty rate and increasing in per capita, more and more people in India should be able to afford buying the luxury commodity which eventually should become an everyday commodity such as in United States. The price is trading at 52 week high of $13 per share so get the stock into your portfolio before it is too late.
  • ICICI Bank (IBN): being the largest bank in India, the Mumbai based ICICI Bank has drawn many smart investors already as the stock was trading from it's all time low of $2.85 per share in October 2001 to $27 per share today. In addition to such an aggressive growth, the company is also giving out annual dividend of $0.39 in August, roughly 1.5% yield. With the growing economy we should expect this stock to at least doubled from the curernt value in the future.
  • Rediff.com (REDF): the Mumbai based online information, entertainment and shopping service provider. Take a look at the web site if you are interested in topics related to India. Don't worry the site is in English. Although just employeeing 252 staffs, the stock listed as small cap has been doing realy well this year rising from $6 per share to $20 per share today, a 200% gain.
  • Sify Ltd. (SIFY): the Chennai based company provides e-commerce services and network services for corporates in India. It also offers Internet access and online portal and content services. Ending March 31, 2005, Sify had 800,000 internet subscribers. Think of it as the AOL of India. The stock has been bullish since October this year and is still going up strong.

1 Comments:

Blogger Investment Center said...

I just came across your blog and wanted to drop you a note telling you how impressed I was with the information you have posted here.
I also have a web site & blog about international investing
so I know what I'm talking about when I say your site is top-notch! Keep up the great work!

11:01 PM  

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