Dream run takes Infy past Rs 5,000 peak

MUMBAI, JULY 16: Infosys Technologies, the software blue chip from Bangalore, is continuing its dream run on the stock markets with its s...

MUMBAI, JULY 16: Infosys Technologies, the software blue chip from Bangalore, is continuing its dream run on the stock markets with its scrip crossing the Rs 5,000 mark to Rs 5110. The scrip is also making waves abroad with its ADR (American Depository Receipt) touching $ 98 on the NASDAQ Stock Market of the US.

Infosys had earlier notched up an incredible 156 per cent growth in net profit to Rs 60 crore for the first three-months of fiscal 1999-2000. The stock has appreciated by over 60 per cent Rs 3175 since the company declared its results on July 9. The Infosys scrip had touched the Rs 5,000 mark last year. The company issued a one-for-one bonus later and the price was adjusted.

“There were exaggerated fears in the market over the culmination of the Y2K (millennium bug) business and its effect on the earnings of software companies,” analysts said, adding, most companies in the sector have progressively reduced their Y2K exposure and their operations are unlikely to be adversely affected. Analystsalso said the slowing down of the ERP business is a temporary phenomenon and should not be interpreted as losing sheen’.

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IT companies have systematically reduced their dependence on Y2K projects and have instead begun to concentrate on newer business avenues like e-commerce. For Infosys, the Y2K business contributed just 6 per cent of the total revenues.

Belying expectations of a growth slowdown in the first-quarter, the infotech sector has been riding high. Barring BFL Software, all IT companies which announced their first quarter results have proved the pundits wrong. With an impressive growth in earnings, marketmen now say the sector seems ready to join the bull run on the bourses. Aiding the sentiment in the IT counters would be the recent statement of Infosys CMD N R Narayana Murthy that the software industry in the country would grow by 30-45 per cent in the current fiscal.