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IT majors steer clear of slump in Q3(Mail Today (India) Via Acquire Media NewsEdge) THE third quarter results of domestic information technology ( IT) majors have taken everyone by surprise. Not only have the revenues of these companies grown significantly, but also the strong order book and healthy growth projections are indicative of the fact that the IT sector has steered past the recession. " The performance of IT companies has undoubtedly been better than that of other sectors and the results have been a positive surprise. The top tier companies, TCS, Infosys and Wipro have proven that their fundamentals are strong. Going ahead, I see the companies achieving their growth projections," Hitesh Agarwal, head, research, Angel Broking, said. On Wednesday, Wipro reported a 21.26 per cent growth in consolidated net profit at Rs 1,217.4 crore for the third quarter ended December 31, 2009. Total income rose to Rs 7,055.8 crore during the quarter, up from Rs 6,773 crore in the same period of the previous fiscal. " We reported another strong quarter driven by significant uptick in volumes. We have maintained margins despite a decrease in our rate realisation and a strong appreciation of the rupee," said Suresh Senapaty, chief financial officer ( CFO), Wipro. The company's IT services business added 31 new clients during the quarter. " We have seen a positive demand environment, which has driven broad- based sequential growth across all our verticals, service lines and geographies. In 2010, we expect IT budgets to be flat to marginally positive," said Azim Premji, chairman Wipro. Similarly, the third quarter results of Infosys Technologies beat market forecasts. The outperformance came on the back of resurgence of demand in the global IT environment. The company's topline grew by 2.8 per cent on a quarter- on- quarter ( q- o- q) basis. TCS, which declared its third quarter results on January 15, showed a 33 per cent jump in net profit at Rs 1,823.90 crore, up from Rs 1,362.06 in the same period of the previous year. " We are seeing the benefit of recovery and the worst seems to be behind us. Even though IT budgets are expected to be flat in 2010, offshore outsourcing is expected to benefit from this recovery," Infosys chief executive officer ( CEO) Kris Gopalakrishnan said after announcing the results. While Q3 results of IT companies are an indication that growth is on the anvil, the performance of IT stocks this year is being closely watched by experts. Analysts are of the opinion that the higher- thanexpected performance of the stock in 2009 had a direct impact on the IT stocks, which gained traction during the year. However, the value of these stocks could now remain flat. Take, for instance, Wipro. The company declared healthy results on Wednesday but its stock closed the day at Rs 725.40 on the Bombay Stock Exchange ( BSE). " The market saw a hundred per cent rally in 2009. Going forward, this year it is difficult to say whether that same euphoria will be maintained or not. This is the time when the market is looking at strong fundamentals and there is little chance of an exponential growth rally. Hence, IT stocks are likely to remain more or less at the current levels," said Jagannadham Thunuguntla, equity head, SMC Capitals Ltd. SIGNS OF REVIVAL Wipro Ltd reported 21.26% growth in consolidated net profit at Rs 1,217.4 crore for Q3 The company's IT services biz added 31 new clients during the quarter Infosys topline grew by 2.8% on a q- o- q basis TCS showed 33% jump in consolidated net profit at Rs 1,823.90 crore We have seen a positive demand environment, which has driven broad- based sequential growth across all our verticals, service lines and geographies. In 2010, we expect IT budgets to be flat to marginally positive Azim Premji, chairman, Wipro Ltd (c) 2009 India Today Group. All Rights Reserved. Provided by Syndigate.info an Albawaba.com company |