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Stocks of major information technology companies are seen up next week, buoyed by the positive momentum set by Infosys, which saw a better-than-expected performance in Oct-Dec. Infosys, the country's second-largest software exporter, posted a consolidated net profit of 23.69 bln rupees for Oct-Dec, nearly unchanged from a quarter ago. Net sales for the quarter, including from the newly acquired Lodestone Holding AG, rose 5.7% on quarter to 104.24 bln rupees. Bengaluru-based company's consolidated net profit for Oct-Dec at 22.21 bln rupees, down 6%sequentially, while consolidated net sales were seen rising a mere 2% on quarter to 101.04 bln rupees. Additionally, the company raised its revenue guidance for the current financial year to March, fuelling hopes that the whole sector may be headed for better times ahead. We believe Infosys's results signal a turn in trajectory of the revenue growth. Although quarter results were driven by a return to a mean in pricing post significant disappointment earlier on in the year, we believe this could reflect some initial success in the company's new, more aggressive strategy.
Investors are now likely to keep a close eye for the Oct-Dec earnings of Tata Consultancy Services, which will be announced Monday evening. The city-based company is seen posting a 3% sequential decline in net profit for Oct-Dec at 34.10 bln rupees, mainly due to seasonal weakness, foreign exchange losses, and lower growth in business volumes. We sees the company's net sales growing a tepid 2% quarter-on-quarter in Oct-Dec to 159.42 bln rupees. Performance by mid-sized CMC, which announced its Oct-Dec earnings yesterday, was also impressive. The company posted a 24% sequential rise in consolidated net profit for Oct-Dec at 610.62 bln rupees, and a 7.5% increase in net sales at 4.93 bln rupees. Street will also watch out for Oct-Dec earnings of HCL Technologies and Wipro, which will be announced on Thursday and Friday, respectively. Oct-Dec earnings of NIIT Technologies, MindTree, and NIIT will also be eyed next week.
