Besides, Infosys beats Microsoft and IBM by a huge margin in terms of price-earnings multiples. The Infosys ADR commands a PE of 117, while Microsoft at $79 3/8 is trading at a PE of just 64 and IBM at $116 5/8 attracts a PE of just over 34.

The ADRs, which jumped by $4.37 on Tuesday, have registered a gain of 13 per cent in two sessions. On Tuesday, the ADRs touched an intra-day high of $61.25 translating into a 60 per cent premium on the share's high of Rs 3,275 on BSE on Wednesday. Over the last one month, the Infosys ADR has risen from a low of $42, registering a gain of around 33 per cent.

Domestic players were quick to realise the potential in Infy and reactivated the counter which clocked a gain of Rs 75 on Wednesday on a turnover of Rs 50 crore. Fundmanagers pointed out that Infy had underperformed the market for some time, thanks to the shift in focus to cyclical stocks.

``Infosys is now in a strong position after its strategic alliance with with Cyberspace Corporation to provide E-commerce services,'' said a fund manager.

Brokers and fund managers point to the strong and stable earnings potential of Infosys even post-Y2K besides the companies management strengths.

But is a PE of 117 for the Infosys ADR warranted when its peers in the overseas markets are trading at a much lower discounting? Among the major information technolgy stocks at Nasdaq, Infosys is the only stock commanding a three figure discounting. But how long can the Infosys ADR keep on attracting interest at such a high discounting, when its peers overseas are attracting much lower discounting?

Brokers say there is very little room for FIIs to buy in the domestic market, forcing them to move to the Nasdaq market. ``The high discounting is likely to continue as long as FIIs areinterested in adding Infosys to their portfolios,'' says a fund manager.

A very high discounting enjoyed by Infosys' ADR was questioned at the time of listing also. But the ADR movement in the past few weeks has proved critics wrong. The Infosys ADR has zoomed from a low of $37 3/8 to its all-time high of $61 1/4 and currently trades at $56 1/8.

The recent spurt in the Infosys ADR to its high of $56 on Nasdaq has pushed the scrip's discounting to a new high. Based on the latest earnings (1998-99), Infosys' price-earnings multiple has zoomed close to 120. The latest price on Nasdaq at $56 (two ADRs comprise one equity share) discounts the latest earnings per share of Rs 40.9 (on post-bonus equity of Rs 33.07 crore) by a price-earnings multiple of 117.

Interestingly, scrips of IBM, Intel and Microsoft, even after share spilts (bonus shares) in the past few months, have bounced back smartly, but the price-earnings multiple still remains in the range of 28 to 64.