Early-bird IT cos weather US slump

Written by Pradip Kumar Dey | Mumbai, Apr 19 | Updated: Apr 20 2008, 05:33am hrs
As the speculation over earnings slowdown take rounds, early-bird results suggest that it may be quite in line with analysts estimates. The fourth quarter net profit of 92-bird companies increased 7.6% to Rs 3,591 crore during January-March 2008, from Rs 3,337 crore in the same period last year. Analysts are expecting a significant slide in the earnings growth number from around 20%-plus levels recorded in earlier quarters. The mood remains that of cautious optimism when a majority of results are to be announced in the coming week.

Nemish Shah, MD, ENAM says, The results have been very positive. It does look that in spite of a US slowdown, IT sector in India will be able to weather the storm. In the sample selected by FE, aggregate sales rose by 42.1% to Rs 30,788 crore during January-March 2008. However, the signs that the 'other income' factor will be subdued this quarter are getting increasingly visible. Other income of the companies marginally decreased 0.7% to Rs 660 crore during the same period. During the earlier quarter, other income was a major factor that buoyed the overall profitability. It accounted for 39% of the profit before tax in the December quarter (3000 company sample). This quarter will see a number of companies accounting for losses incurred in the derivatives market.

Overall, the performance of companies has been significantly boosted by the presence of some IT, food-processing and media majors like Infosys, Wipro, HCL, Temptation Foods, Himalya International, Sanwaria Agro and Zee News, NDTV.

Infosys sales rose 19.13% to Rs 4,235 crore, the net profit rose 5.16% to Rs 1,182 crore during the quarter ended March 2008. Vakrangee Software posted a 95.34% jump in sales to Rs 74.60 crore and 68.58% rise in net profit to Rs 17.87 crore.