Is this bear run for real?

Margins are under pressure. Big companies are not spending much on tech front these days. Infosys MD Nandan Nilekani said his campus has not seen a client visit since March 15. “Today’s customers want to have their cake and eat it too,” Wipro chairman Azim Premji.

Though investors suffered badly in the meltdown, many are still pinning their hopes on the firm. A section of investors feel bear operators hammered down the prices systematically and pulled down tech stocks. The magnitude of the fall surprised many investors. Opinion is divided about growth of tech sector.

More jitters likely
Partha Iyenger,
Research Director, Gartner

“I think that markets over-reacted hugely to the guidance given out by the company… MNCs have also realised how much potential exist for them, and thus the IT companies are facing pressure on their margins. Infy always tends to paint a slightly pessimistic picture. Investors, will get back their money. There will be a little more turbulence with a couple of more results expected.

Infosys will soon break away from being the top among Indian IT companies to be in the same league as the top 10 global majors. Reason: The global slowdown will only fuel further growth in India.”

Knee-jerk reaction
Avinash Shastri,
Chartered Accountant

“I invested in Infosys almost five years back and now I am quite used to the volatility in tech scrips. Infosys, I think, is fundamentally a good company and has a future—despite the recent crash. As a long-term investor, I’m not worried about the crash. But tech shares are undergoing a re-rating… so an investor should act wisely and not succumb to any knee-jerk reaction.

Infosys and Wipro are not fly-by-night companies. I do not understand why the Infy scrip fell so drastically. Tell me how many companies have posted 25% rise in net profit in the fiscal 2003?”

A doctored fall
D. K. Ahuja,
A central govt employee

“The whole episode was a planned initiative. Bears always look for such opportunities and this time with the long bank holidays, they got it. Crises like this are part of the market’s operations and would not affect a scrip like Infosys. Also the operators who always tend to work against the market sentiments had a large hand in pulling the market down otherwise just a statement on dim outlook should not have made so grave an impact. Overall it is not going to affect the scrip value.”

A good investment
Motilal Oswal,
Chairman, Motilal Oswal Securities

“I feel that Infosys is a good investment for a long term value investor. In short term, there can be some ups and downs. The markets always over-reacts to any kind of negative or positive surprises. It got further compounded by bank holidays.”