The Hindu Business Line : Infosys ADR jumps 20% on strong numbers

Thanks to better-than-expected earnings from Google Inc, JPMorgan Chase and Citi group, the US equities soared across-the-board. While the S&P 500 & the Dow Jones Industrial Average added 4.3 per cent each, the tech-focussed Nasdaq jumped 4.9 per cent.

The positive global reaction lifted the sentiment for the domestic market too. Besides, decent set of numbers and encouraging guidance for FY-2009 from Infosys Technologies also boosted the sentiment. The BSE Sensex ended the week with a gain of 4.3 per cent and the broader NSE S&P CNX Nifty soared 3.78 per cent.

Information technology ADRs were in the limelight thanks to Infosys’ strong financial performance. Despite talk of slow down in the US, Infosys’ revenue grew 6.3 per cent q-o-q in Q4 FY08, in line with analysts’ expectations. Infosys has estimated consolidated revenue guidance of $5.05 billion for the new fiscal (2008-09), projecting year-on-year growth of 21 per cent over FY-2008 under the American accounting practice. Following the strong numbers, the ADR jumped 20 per cent this week to end at $43.08 against the previous week’s close of $35.81.

While Satyam jumped 15.5 per cent at $26.29 ($22.76), Patni Computers jumped 14.6 per cent at $14.02 ($12.23) and Wipro soared 12.7 per cent at 12.43 ($11.03). Wipro posted a net profit of Rs 880 crore for the fourth quarter ended March 31, 2008, a growth of 3 per cent, as against Rs 856 crore registered in the corresponding quarter previous year. The company’s revenue for the period stood at Rs 5,700 crore, up 32 per cent, when compared with Rs 4,319 crore posted for the corresponding quarter a year ago. The company posted a consolidated net profit of Rs 3,283 crore for the financial year 2008, an increase of 12 per cent.

Banking counters – HDFC Bank and ICICI Bank, also surged 9.4 per cent and 6 per cent respectively. The gain was despite a 50 basis point hike in cash reserve ratio by the RBI, which could impact the banks’ bottomline.

Telecom counters MTNL and Tata Communications also moved up by 7.5 per cent and 7.8 respectively on good show.

Dr Reddy’s Lab jumped 5.24 per cent, Sterlite gained 5.8 per cent and Rediff.com moved up by 6 per cent. Sify was the lone loser.

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