Infosys Technologies was the biggest gainer among BSE Sensex stocks on Wednesday following renewed buying support from FIIs and operators.
The scrip of India's second largest software exporter was up by 3.46% at Rs 4,178 on the BSE by 11:50 IST. A huge volume of over 195,000 shares was recorded on the counter. In 25 sessions between 6 February and 17 March 2003, the scrip had shed 11.23% to Rs 4,038.10 from Rs 4,549.
Dealers said the recovery in the Infosys scrip was mainly due to buying support from a group of operators Foreign institutional investors were also said to be active on the counter. On the other hand, domestic institutions offloaded the stock.
The renewed interest in the stock was purely on hopes that the war between US and Iraq, which now looks inevitable, may last for a short period, thereby not affecting the revenues of Indian software firms from the US. Local tech stocks have been badly affected of late due to concerns that if a war breaks out, the IT sector will be the worst-hit as it receives over 65-75% of its export revenues from the US. Reports that a legislature in the state of Washington may soon consider a Bill that will make outsourcing from India difficult, had raised further concerns about the earnings of the sector.
Meanwhile, the gains in Infy, the company's American Depository Receipt listed on the Nasdaq, on Tuesday have also garnered interest in the stock. Infy was the most impressive performer among Indian ADRs, spurting by $1.48 to $61.46.
For the third quarter ended 31 December 2002, Infosys registered a 24.4% rise in net profit to Rs 256.31 crore (Rs 2.56 billion) on net sales of Rs 958.64 crore (Rs 9.58 billion).
In the said quarter, 384 new projects were started by the company. In fact, it is seeing a spate of projects moving to offshore right now. However, the company does not expect significant change in the offshore-onsite mix (which can result in substantial improvement in margins). About 55.5% of its revenues in Q3 were onsite and 44.5% offshore. In Q2 ended September 2002, onsite revenues were 54.6% and offshore at 45.4%.
Infosys had issued a conservative guidance for the fourth quarter. But analysts are confident that the company may surpass its own guidance. For the quarter ending 31 March 2003, Infosys expects income from software development services and products to be in the range of Rs 975-Rs 989 crore (Rs 9.75-Rs 9.89 billion), translating into 1.7%-3.2% growth on a sequential basis. It expects earnings per share to be between Rs 39.1- Rs 39.4, resulting into 1%-1.8% growth in bottom line on a sequential basis.
BSE code: 500209
