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(The Hindu Business Line 13th May 2008) For the quarter ended March 31, 2008, IT bellwether Infosys Technologies recently announced a consolidated net profit of Rs 4,659 crore a 20.82 per cent growth over the corresponding period a year ago. It has given a guidance (always conservative) of 16.3-18.3 per cent growth in earnings per share (EPS) to Rs 92.32-93.92 for the fiscal year ending March 2009. This, despite a challenging economic environment in the US (where the main customer base of Infosys is located) as well as a downturn in its major vertical of financial services, is indeed commendable and displays the resilience of Infosys to weather the impending storm and continue to grow. Even after the dotcom bust, Infosys had managed to keep its head above water. The pressure on IT budgets of US clients have caused companies such as Infosys to move substantial work offshore and thus safeguard their operating margins. They have also increased their footprint into Continental Europe and A...

Top IT counters make recovery (The Hindu Business Line 26th Feb 2008)IT stocks were up today on a relief rally. HCL Infosystems gained over 5 per cent. HCL Tech went up around 4 per cent. Wipro was up more than 4 per cent. Infosys moved up by 2.11 per cent. Satyam Computer gained 2.62 per cent. TCS and MphasiS finished marginally up. In the past one week, top IT counters made some recovery, but the strength still amiss. “The top companies are not under-owned and re-rating exercise yet not visible,” felt Mr Arun Kejriwal of KRIS. Mr Gul Teckchandani, an equity strategist, felt that with a relatively stable rupee against dollar now, and prospect of revenue growth of 30 per cent during the calendar year, the low debt IT blue chips are surely opportunities. Last year, the rupee had a sharp upward movement of 12.3 per cent against dollar. This year so far, it has been flattish. In the immediate term, a sudden and sharp appreciation in the rupee is also least apprehended in the currency mark...

IT stocks lead 523-point fall (Business Standard 6th Feb 2008) A steep decline in the information technology (IT) stocks due to contraction in the US services sector yet again dragged Indian stock prices as investors judged recession in the world’s biggest economy will trigger big cuts in IT spend, affecting revenues of companies such as Infosys, TCS and Wipro. Top IT stocks, which had run-up by over 20 per cent during the past two weeks, shed 5 to 6 per cent on Wednesday thereby becoming top losers among the 30 Sensex shares. While the Bombay Stock Exchange (BSE) Sensex declined by 2.81 per cent (523 points) to close at 18,139, the broader S&P CNX Nifty of the National Stock Exchange (NSE) shed 2.94 per cent (161 points) to settle at 5,322. Satyam Computers was down 6.74 per cent at Rs 408.65, Wipro Ltd fell 6.45 per cent at Rs 425, Infosys Technologies declined 6.25 per cent at Rs 1,510.60 and TCS Ltd dipped 5.15 per cent at Rs 900.55. The IT index on BSE was down 5.59 per cent....

Too early for optimism on IT (Live mint.com 6th Feb 2008)The Bombay Stock Exchange’s IT (information technology) index is the only sectoral index to have fallen by less than 10% from its closing high in January. One of the reasons for the lower decline is the fact that IT stocks had already underperformed by a large margin in 2007. But another factor was the bout of buying since late last week, on the premise that IT stocks were available very cheap. Prior to the relief rally, trailing valuations on frontline stocks were around 18 times trailing earnings. Now, valuations have reverted to about 20 times. Remember, core operating profit has grown by just 18% for Tata Consulting Services Ltd (TCS) and Infosys Technologies Ltd in the first nine months of this fiscal, so that doesn’t leave much on the table. (For Wipro Ltd and Satyam Computer Services Ltd, it was even lower at 8% and 15%, respectively.) So far, the sound bytes from software and software services providers have been cautiou...

IT stocks back in favour; Index gains 4.15% (The Hindu Business Line 5th Feb 2008)IT stocks, which had been the flavour of the market before their recent eclipse by infrastructure and other core sector stocks, are now back in favour on Dalal Street. Their low levels have led to a renewed buying interest, and while the market sentiment is still sluggish, there seems to be a contrarian view as far as IT stocks are concerned. The BSE IT index went up 4.15 per cent on Monday, while the benchmark index Sensex rose 2.29 per cent. Over the last week, BSE-IT has gained 11.96 per while the Sensex was up 2.80 per cent. “The IT sector is attracting interest, as many investors who sold value stocks of other core sectors during the market fall of January 21, picked up IT stocks at lower levels,” said Mr Vishwas Agarwal, an independent analyst. “The negatives had been factored into the prices of IT stocks in the last couple of weeks and the large-cap basket seems to be attractive to investors at the...

US slowdown: smaller IT firms more vulnerable than large peers (Live mint.com 28th Jan 2008) Even as India’s top 5 software service vendors such as Tata Consultancy Services Ltd (TCS) and Infosys Technologies Ltd say they don’t see a slowdown in demand for their services from buyers in the US, it is becoming clear that smaller vendors could see orders slipping if information technology (IT) spending by such clients is tightened in the event of a recession in the world’s biggest economy. TCS, Infosys and their peers Wipro Ltd, Satyam Computer Services Ltd and HCL Technologies Ltd have said the credit crisis in the financial sector in the US, the segment from where the bulk of revenues come for Indian software vendors, had not impacted their revenues in the latest quarter. The October-December earnings for the top 5 firms have been in line with analyst estimates and vendors maintained their operating margins through improved billing rates, higher offshore leverage, a shift towards fixed...

Forrester lowers outlook for IT growth in US (The Economic Times 10th Jan 2008) The cement industry in Tamil Nadu has agreed to sell subsidised cement to support the “economically weaker and middle class consumer.” According to an official press release, in deference to the State Government’s demand that cement manufacturers control prices, the industry has agreed to sell 20 lakh bags (50 kg a bag) of cement a month at a subsidised rate of Rs 200 a bag to support the economically weaker and middle class consumer. Cement now sells around Rs 240 a bag in the open market. Manufacturers and others selling cement here have said each company would pick up the districts in which it would sell the subsidised cement. Government officials at the district level would identify the beneficiaries and issue permits. The manufacturers would directly deliver the cement to the buyer. More Forrester downgrades 2008 spending estimates (The Hindu Business Line 10th Jan 2008) Forrester Research, in its lat...

After difficult year, IT braces for US downturn (Live mint.com 7th Jan 2008)After weathering a tough 2007, India’s flagship IT companies face the spectre of the US economic slowing and squeezing profits as they start unveiling earnings this week, analysts saySoftware firms such as Tata Consultancy Services Ltd, Infosys Technologies Ltd and Wipro Ltd were last year roiled by the rupee’s steepest appreciation against the dollar in three decades, surging wages and real estate values and the end of a tax holiday. More

IT counters suffer most (The Hindu Business Line 7th Jan 2008)Amid fears of recession following weak economic data – increase in unemployment to a two-year high and decline in manufacturing, the US stocks slumped to five month low. The first week of the New Year started on disastrous note, as the S&P 500 retreated 4.5 per cent to 1,411.63 last week – the steepest fall in five months. The Dow Jones Industrial Average slumped 4.2 per cent to 12,800.18. That brought its loss since December 31 to 3.5 per cent, the worst first three days of any year since 1904, according to Bloomberg data. The Nasdaq Composite Index declined 6.4 per cent to 2,504.65, the lowest since April. More