The Hindu Business Line : Infosys ends up marginally

Infosys shares gained about Rs 14 to close at Rs 2,183 on Thursday. The rise on the day of the results announcement is in keeping with the trend shown every quarter since April 2006. Interestingly, the company's stand on guidance for the year seems to be a factor in the share price rise.

Take, for example, results for the quarter ended September 2006. Infosys had said that it was increasing revenue-growth guidance for the year ending March 2007 to between 45.5 per cent and 46 per cent. That day, the share price rose about 4 per cent to close at Rs 1,981.35.

Raised Guidance

In July 2006, announcing results for the June quarter of the year, Infosys raised guidance for revenue growth for the full fiscal to between 40.2 per cent and 40.7 per cent. That day the share price rose 7.5 per cent to close at Rs 3,386.45 (price prior to 1:1 bonus).

In April 2006, announcing numbers for the period ended March 2006, the company had shown a revenue growth of 33.5 per cent as compared with expectations of 26 per cent growth indicated at the start of that year. The share price jumped 6.9 per cent on the next trading day (since the markets were closed on the day of the results) to close at Rs 3,230.3.

In the latest third quarter results announced today, Infosys said that full-year revenue growth would be in the range of 46.1 per cent-46.2 per cent (which is not a significant change from what was indicated in September) and that it has not changed estimates of Rs 66 earnings per share. The stock dipped to a low of Rs 2,100 during the intra-day, but it later recovered. Does that explain the marginal rise in share price today?

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