The Hindu Business Line : IT stocks zoom on the eve of quarterly results

The Hughes Software and MphasiS BFL today declared their Q3 results and upped their guidance for the Q4. But the grand opening for the earning season will begin with Infosys' results tomorrow.

The stock market expects that the top four - Infosys, Wipro, Satyam and HCL Tech - will beat their earlier profit projections.

According to Mr Gul Tekchandani, a market guru, the increasing long-term orders, abatement of pricing pressure and further dent into new geographical market areas other than the US, has kept the companies in the sector in better health.

Over the last few quarters, Infosys has strengthened its grip over Europe and Australia. Wipro, Satyam and HCL

Tech have increased their presence in Europe and Japan.

"But most importantly, the recovery in US economy and the cost cutting binge of the US corporates have created an increased demand for the Indian IT and ITES. This growth is likely to continue as long as the recovery and cost reduction pressure continues for the US companies," Mr Tekchandani commented.

The market hopes that the IT stocks would record a bottomline growth of 5 to 7 per cent sequentially in Q3. Infosys had projected a net profit of Rs 300.16 crore for the third quarter. The market expectation is that it will post a profit of atleast Rs 320 crore.

According to Motilal Oswal Securities' estimates, Infosys is to report a 7.9 per cent growth in revenue and a 8 per cent PAT rise (q-on-q) in Q3. Wipro, according to its projection, is likely to up its net income by 4.5 per cent. For Satyam, the expectation of revenue increase is placed at 5.4 per cent (q-o-q) and the PAT growth is put at 0.1 per cent. For HCL Tech, the revenue increase is estimated to be 6.8 per cent but a PAT reduction of - 6 per cent q-o-q.

The top four listed stocks had seen their 52-week high on January 6 on the NSE but their volume figures showed an upwardly mobile line from January 1 till today's closing.

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