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Our Bureau

Mumbai, Oct. 11

IT bellwether Infosys Technologies quarterly results seemed to have a cascading effect on IT stocks today as majority of them reported a fall in value.

Satyam Computer fell by 7.5 per cent, Infosys which was amongst the top gainers in yesterday’s bull rally dipped 6.99 per cent, HCL Tech (5.35 per cent), TCS went down 4.72 per cent, whereas Patni Computers, Wipro and i-flex Solutions went down by 4.28 per cent, 2.99 per cent and 3.21 per cent, respectively.

In spite of satisfactory performance by Infosys, IT stocks took a beating on expectations of higher guidance, believe marketmen.

“Infosys net profit growth is almost in line with general expectations. However, the investor community expected the company to revise its earnings a little more aggressively for the full fiscal year,” said an analyst with a Mumbai-based brokerage firm.

Although the IT giant could not live up to market expectations, market trackers believe that the performance has been rather good and satisfactory.

“Topline in dollar and rupee grew, operating margins have gone up, but the other income fell, drastically impacting the bottomline,” said Mr Anil Advani, Head-Research, SBICAP Securities Ltd.

As IT stocks had been doing well for quite some now, the institutional investors have taken this as an opportunity to book profits.

“There was substantial selling by FIIs and domestic institutions on the Infosys counter, although the numbers and results for the quarter were good but the company did not revise guidance as per expectations, which was the main reason the stock prices were going up since the past few days,” said Mr Jignesh Desai, Head of Institutional Sales, SBICAP Securities.

The overall results and operational profits were better than expected and the company could handle the rupee pressure quite well, said Mr Sandeep Shenoy, Strategist at Mumbai-based PINC Research.

Going forward, the appreciating rupee could be the most pertinent concern, especially if the rupee appreciates to around 37 to the dollar, as expected by the market, said another analyst.

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