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Infosys expected to post 120 per cent rise in bottomline

Netscribes/Abhijit Basu

Slowdown or no, the markets expect Infosys to continue its winning ways. In fact, analysts and marketmen say the software major's fourth-quarter bottomline and topline will grow by over 120 per cent and 100 per cent, respectively.

Infosys is scheduled to announce its fourth-quarter results on April 11, 2001.

A report by international brokerage Dresdner Kleinwort Wasserstein estimates that the company's bottomline would grow 123 per cent to Rs 1.9 billion for the fourth quarter ended March 31, 2001. Sales are seen growing 109 per cent to Rs 5.8 billion. The US-based investment bank expects Infosys' EPS to grow 123 per cent to Rs 52.06 for the year.

A consensus estimate of Wall Street analysts polled by a leading financial website predicts that Infosys' earnings for the year would jump 114.6 per cent.

The US slowdown had given rise to widespread fears that a cut in technology spending by leading US firms would have an adverse impact on Indian software exporters, considering that the US market accounts for over 60 per cent of the Indian software industry's exports.

Infosys offers software services to global giants like Nortel Networks, Boeing and Cisco Systems. However, like other leading IT software and services firms in the country, Infosys might escape the impact of the slowdown this quarter.

"Although Nortel's move to hold back investments might be a cause for concern, the impact of the slowdown will be felt only in the April-June quarter of FY2002. For the last quarter, Infosys might not be so badly hit," said a senior software analyst at Span Capital Services.

International brokerage UBS Warburg, in a report last month, cut price targets of three leading Indian software companies, including Infosys, saying their growth is likely to be hit by the slowdown. The report said Infosys could see lower sales growth of 40-50 per cent for the year ending March 2002 on the back of a troubled US environment.

"That it will be hit to some extent is known. However, companies like Infosys have the capacity to cope with a squeeze whenever it happens. Last quarter was when the slowdown happened and the impact will flow over to the next few quarters," said Manish Agrawal, software analyst at Pranav Securities.

Meanwhile, Infosys still remains a buy for the market. Goldman Sachs and DKW have out recommended a buy on the scrip, which closed at Rs 3912.95, down from its previous close of Rs 4073.10.

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