Infosys beats estimates, returns to sequential growth in Q2

Raises guidance from negative to growth of 1.7% as net rises to Rs 1,540 cr.

Bangalore Oct. 9 Buoyed by an improving business climate and favourable cross currency movement, Infosys Technologies Ltd returned to a sequential growth in the September quarter.
The company beat its own as well as street’s estimates for the quarter, and raised revenue forecast for the year ahead.
Infosys, which had seen a sequential fall in the last two quarters, posted a net profit of Rs 1,540 crore during the period, a one per cent increase from the June quarter.
On an annualised basis, net profit grew 7.5 per cent. Revenues increased 2.1 per cent sequentially and 3.1 per cent annually to Rs 5,585 crore.
The company declared an interim dividend of Rs 10 a share (200 per cent on par value of Rs 5 each).
Infosys raised its full year guidance to an annual growth of 1.2 per cent to 1.7 per cent from its earlier estimate of a decline of 1.3 per cent to a growth of 0.3 per cent. It expects fiscal 2010 revenue to be in the range of Rs 21,961 crore and Rs 22,055 crore, compared with its earlier forecast of Rs 21,416 crore and Rs 21,747 crore given at the beginning of the quarter.
Improved climate

“In the second quarter, the business climate has improved,” said Mr S. Gopalakrishnan, Chief Executive Officer and Managing Director.
“Clients are now looking to invest in a few strategic initiatives and relationships to maximise value from opportunities when the economic downturn ends,” he added.
During the quarter, there was a volume growth of about 2.3 per cent, and pricing had stabilised, Mr Gopalakrishnan said.
The company saw a 0.4 per cent increase in blended pricing.
Utilisation (excluding trainees) has improved to 73.2 per cent from 70.9 per cent in the previous quarter, indicating an increase in business.
Wage increase

Infosys announced an 8 per cent wage increase for its employees in India and 2 per cent for its overseas staff effective October 1.
“The momentum gathered during the quarter would give the company better growth in the second half of the year,” Mr Gopalakrishnan said.
Infosys has the capacity to take advantage of larger opportunity if it arises.
For the December quarter, Infosys expects revenue to be in the range of Rs 5,429 crore and Rs 5,476 crore, a year-on-year decline of 6.2 per cent to 5.4 per cent.
The company has factored Rs 47 to a dollar for its guidance. However, in dollar terms, the company expects a one per cent growth in revenues for each of the remaining two quarters.
Scrip down

The muted outlook due to a strengthening rupee saw Infosys scrip shed 1.5 per cent to close at Rs 2,178.35 on the BSE in a weak market.
The company’s ADR declined 3.25 per cent on NYSE at 9-15 p.m. IST.
Infosys gained $18 million from cross-currency movements, wherein the dollar weakened against other major currencies during the quarter, said Mr V. Balakrishnan, CFO.
Top five clients grew 5.8 per cent sequentially, while the remaining 566 active clients grew at 1.8 per cent.
Clients cautious

“The demand environment has stabilised, but clients are still cautious about recovery in their markets,” said Mr S. D. Shibulal, Chief Operating Officer, Infosys.
Quoting a recent survey done by Infosys, he said that clients expect recovery to be protracted till late 2010.
Infosys added 35 clients including T-Mobile in the quarter, where it saw an all round growth.
“There is increasing traction for our systems integration services due to mergers and acquisitions, especially in the financial services segment,” said Mr Shibulal, adding the company was working on five such deals.
Clients were finally taking decisions on rationalising their IT systems, which is giving the company an opportunity in systems integration space, he added.
(Source: BL http://www.thehindubusinessline.com/2009/10/10/stories/2009101051950100.htm)

Stock market burst within one or two months: Jhunjhunwala

Press Trust of India / Mumbai October 8, 2009, 17:39 IST

Big bull Rakesh Jhunjhunwala feels the Indian stock market, currently on an upward rally, may "burst" in a month or two.
"If your see the formation of the indexes, all the stocks are going up, indexes are going up. (There are) minor corrections at every point. You cannot have this kind of a rise...(a) peak without burst. I think the burst will come within one or two months," Rare Enterprises Partner Rakesh Jhunjhunwala said at the Private Equity International India Forum 2009 here today.


Indian capital markets have been heading northward led by robust liquidity positions and on the belief that economic recovery has begun. However, "I have a right to be wrong and I may change my opinion very fast," Jhunjhunwala said.


He said the future of Indian market depended on the performance of the Indian economy and the international scenario.


"I think economic growth in India is going to be between 12-14 per cent over the next 5-7 years. I think the factors that are guiding this growth are irreversible, whether it is skills, tolerance, democracy, demographics," Jhunjhunwala said.


"And if growth in corporate profits is going to be a percentage of nominal GDP growth which it is worldwide, I don't see any reason why corporate profits should not grow between 15-17 per cent compounded," he added.


However, there is still some pain left for the western economies which have not yet witnessed the peak of the economic slowdown.


"As far as the economic slowdown goes, I think we have not (yet) seen the peak. I think the next 2-3 years for the western world are going to be far slower than for the rest," Jhunjhunwala said.


According to him, even though India places significant importance on foreign fund inflows, the amount of local money invested in the markets in the last five-years has been far greater than foreign money.


The Dalal Street guru said he has decided not to invest in start-up companies "because you have to nurture them and bringing them to size is a bit of a painful process".


"This year, I think Rs 2,500-3,000-crore local money will come and in two years maybe Rs 6,000 crore. I am bullish. The flow of money is going to go through the roof," he said.


The market pro said he does not expect India to hike interest rates before March next year.
(Source: BS http://www.business-standard.com/india/news/stock-market-burst-within-one-or-two-months-jhunjhunwala/75477/on)

INFOSYS Q2 WATCH

INFOSYS  is to announce 2nd Quarter results tomorrow on 9 October 2009. This post is just a view about what the expectations are from the results and then we can see tomorrow how actual results go.  

According to CNBC-TV18's estimates, its net profit is expected to go down by 1.1% to Rs 1,509.4 crore in Q2FY10 versus Rs 1,527 crore in the previous quarter.

The company's revenues are expected to go up by 2.4% to Rs 5,604.3 crore versus Rs 5,472 crore, QoQ. EBIDTA (earning before interest, depreciation, tax and amortisation) is likely to go up at Rs 1,880 crore from Rs 1,868 crore, QoQ.

What had INFOSYS guided in Q1:-

-Revenues - Rs 5318-5413 crore and $ 1110-1130 million

-QoQ growth - down 2.8-1.1% in rupee terms and down 1.1%-0.7% in dollar terms

-Net profit implied Rs 1,357-1,381 crore

-QoQ growth down 9.5-11.1%

-Guidance given at 1 US $ = 47.91

-If they match Q2 guidance in $, asking run rate for next 2 quarters will be 0-1% versus 2-3.5% earlier

INFOSYS Q2 results for FY09 (announced in Oct 2008):-

Revenue Rs 4851 Cr

EBITDA Rs 1470 Cr

Adj Net Income Rs 1258 Cr

Infosys issues guidance based on the rupee-dollar rate at the end of the quarter, which is 48.11 for the September quarter. In the past few days, the rupee has appreciated by 3% to 46.68, which will not be reflected in Infy's guidance.

INFOSYS result day normally some panic sell-off is seen but whatever the result one is advised to avoid this stock for time being as there is a lot of volatility after the announcement of the results. Always read the fine print and then take decision of investing.

Infosys Q2 result to shed light on recovery http://economictimes.indiatimes.com/news/news-by-company/earnings/Infosys-Q2-result-to-shed-light-on-recovery/articleshow/5099974.cms

Infosys Q2 net profit seen down 1.1% at Rs 1509.4cr http://www.moneycontrol.com/news/result-poll/infosys-q2-net-profit-seen-down-11-at-rs-15094cr_418402.html

Outlook positive for IT Revenues in Q2 http://www.mydigitalfc.com/news/outlook-positive-it-revenues-q2-531

PREVIEW-India IT firms Q2 net seen up, rupee rise a concern http://in.reuters.com/article/companyNews/idINBOM34216220091007

Weekly Technical View by Tanmay G Purohit:

Nifty (5083) closed 2.51% up week on week after both Nifty and Sensex have closed above psychological levels of 5000 and 17000 respectively. India's annual June-September monsoon rains, vital for farm and overall economic growth in Asia's third-biggest economy, were 23 percent below average in 2009, the worst since 1972, government data showed on Thursday. But because of lower rains this season, Inflation has inched up towards 0.83% as of September 19 and analysts expect the rate of price rise to cross 7% by this fiscal end. India's finance minister Pranab Mukherjee warned "there is inflationary potentiality and inflation may go up further. When it goes up it is a matter of concern.". India's exports fell by annual 19.4% in August for the 11th straight month, but exporters bleeding under the global recession foresee better times around Christmas. But amid hopes of economic revival and worries of rising unemployment, the US economy has been in recession for 23 months, one of the longest periods since the 1930s Great Depression. Auto Sales for the month of Sept 2009 have hit record high after GM, Hyundai, Honda and Ford sold record number of vehicles on the back of festive season and banks flooded with deposits provided easier credit norms. The director general of hydrocarbons has blamed the fight over gas supplies between the Ambani brothers for the poor response to 70 oil, gas and coal-bed methane blocks on offer. “Fewer numbers of bids may come in for Nelp-VIII due to negative publicity because of the fight between two corporate giants,” said V K Sibal, director general of hydrocarbons indicating the transparency of Indian firms is at stake owing to the Ambani Fued. Nifty crucial support exists around 4880-4900 and as long as that is sustained, one should not worry much about trend reversal. But risk-reward is still not favourable and traders would enjoy this market, investors need to be cautious and 60-70% cash may be kept aside for future investment picks. NTPC and GAIL look good and one can accumulate these stocks for long-term gains. Caution advised if 4880 is broken.

Supp 5015/4955/4880 Res 5125/5188/5296

http://economictimes.indiatimes.com/Stocks-in-News/NTPC-looks-attractive-for-value-investors/articleshow/5079423.cms NTPC looks attractive for value investors
http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4409 Ambani vs. Ambani: A Dispute over Natural Gas Prices Flares Up
http://www.mydigitalfc.com/companies/ambani-row-hits-nelp-viii-319 Ambani row hits Nelp-VIII

Last Week Recap Of Technical View:

Nifty (4958) closed flat to end the week as it fell 17 points and even after breaching the psychological 5000 mark intraweek, last 3 sessions it has not been able to sustain above the 5000 level. Nifty still doesn't show any weakness and more upside may be possible but market participants may keep positions light as next week is short (just 3 days in the week to trade) with one more extended weekend as Friday is also a holiday. 30 September is the date for many hedge funds investors worldwide to apply for redemption and if redemption pressure is high owing to best rally since 1991 for Indian indices, many funds may not become aggressive and volumes may dip a bit because of lower participation. Next month we will witness Q2 results also which will confirm if the recovery mode for economy is still on, INFOSYS and HDFC are to announce results on 9th and 13th October respectively going by recent data. Advance Tax payments were higher by more than 14% for corporate India and if the results are up to the mark, our economy may well have started the booming process once again. But for now the best looks to be discounted by the market going by 73% rise in Sensex this year so far and current P/E above 22 gives a feeling of overstretched markets. Current rally is fueled by liquidity but liquidity is one thing which goes out on first instance of panic itself, so even if the up-trend may continue, one needs to remain cautious at higher levels. 
Nifty crucial support level is at 4700 and if it closes below that level for 2-3 days successfully we may infer that the correction has started, until that one can stick with the positions, especially traders. Pharmaceutical stocks have come into big limelight on Friday as BSE Healthcare Index was up 5% and GLENMARK can be value-pick at current levels.

Supp 4900/4825/4732 Res 5040/5120/5188

Will This Impact Markets In Near Future?

http://www.rttnews.com/Content/TopStories.aspx?Id=1077094&Category=Top%20Stories&SimRec=1&Node=B1

Iran Developing Second Uranium Enrichment Plant Capable Of Making Nuclear Bomb 9/25/2009 9:51 AM  ET
(RTTNews) -  International Atomic Energy Agency (IAEA) has confirmed Friday reports that the Iranian government has disclosed to the UN nuclear watchdog the existence of a second uranium enrichment plant. 
The news, alarming the international community, comes a day after a historic UN Security Council meeting unanimously adopted a resolution calling on states to prevent the spread of nuclear weapons, promote disarmament and reduce the risk of nuclear terrorism.
IAEA spokesman Marc Vidricaire told reporters that Monday, Iran informed in a letter sent to the Vienna-based UN agency chief Mohammed ElBaradei that "a new pilot fuel enrichment plant is under construction in the country."
Details about the location of the facility, the status of its operations, or the type and number of centrifuges it was running, were not revealed in the letter, but said additional information would be provided "in an appropriate and due time." 
Iran reportedly admitted to the site after finding out that Western intelligence agencies knew about the project. 
The new facility, located on a military base near the holy city of Qom, south of Tehran, is big enough to house 3,000 centrifuges, the diplomat said, quoting intelligence reports.
That is sufficient to manufacture bomb-making material, but not enough to power a nuclear reactor, he added.
The IAEA has sought from Tehran specific information and access to the nuclear facility as soon as possible.
Tehran, which boasts of its increasing nuclear capacity from time to time, claimed Tuesday that it has developed a "new generation" of high capacity centrifuges for enriching uranium and is testing them. 
Ali Akbar Salehi, the head of Iran's nuclear energy agency, told a press conference that its Natanz enrichment plant can enrich uranium with "more than five times the output capacity" of the earlier standard centrifuges. 
Iran is facing the threat of a fifth round of sanctions from the Security Council to pressure it to stop uranium enrichment. The Islamic nation denies accusations that it is seeking to develop nuclear weapons, and insists that uranium enrichment is meant for peaceful purposes.
Ending more than a year of deadlock on Iran's talks with the international community, the Islamic republic and six world powers are set to discuss on October 1 a package of proposals put forward by Tehran.
It is not clear whether Iran agreed to talks on its disputed nuclear program or the discussions will be confined to global nuclear disarmament.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ai3EnM4PPHP8 
Iran Fires Short-Range Missiles in ‘Deterrent’ Tests (Update2)
By Ladane Nasseri

Sept. 27 (Bloomberg) -- Iran fired short-range missiles as part of a military maneuver and said it will give a “crushing” response to any armed aggression.
Iran “successfully tested a multimissile launching system,” state-run Press TV reported. “A number of missiles including the homemade Fateh and Tondar” models were launched both simultaneously and consecutively, the report said.
The exercises may increase tension over the Persian Gulf country’s nuclear program. Iran’s Revolutionary Guards Corps said yesterday it would conduct the war games to maintain the “deterrent capacity” of the armed forces.
The military plans to test medium-range missiles, such as the Shahab 2 missile, later today as well as improved long-range Shahab ones tomorrow, General Hossein Salami, head of the air force, told Press TV.
“The message is that of security,” Salami said. “We will respond to any military action in a crushing manner.”
Today’s exercise, called Prophet IV, will assess “recent technical developments and tactical progress” in surface-to- surface missiles, Salami said, according to a report on the Guards’ official Web site.
The maneuver is also aimed at “practicing management of long-term preventive and defensive operations,” he said.
'Greedy Nations’
“The range of our missiles is in no way a threat for the neighboring countries,” Salami said. “It is a message for certain greedy nations that seek to create fear, to show that we are able to give a swift and suitable answer to our enemies.”
Iran two days ago confirmed the development of a second uranium enrichment facility in the country, a move condemned by the U.S., U.K. and France.
The enrichment activity is at the center of western concerns about Iran’s nuclear program. The process isolates a uranium isotope needed to generate fuel for a nuclear power reactor, though in higher concentrations it can be used to make a weapon.
Iran will continue to enrich uranium at a low level of 5 percent concentration or less, said Ali Akbar Salehi, the head of the country’s Atomic Energy Organization, according to a report on the Iranian Labour News Agency. Iran also said yesterday that it will allow the United Nations International Atomic Energy Agency to inspect the enrichment facility, located outside Tehran on the road to the holy city of Qom.


Military Option


Iranian officials have rejected criticism for failing to mention the plant’s existence until two days ago, arguing that it’s only required under IAEA regulations to inform the agency 180 days prior to introducing nuclear material in the site. President Mahmoud Ahmadinejad said Sept. 25 the facility is “18 months away from operation.”


At a Sept. 25 news conference concluding the G-20 summit, U.S. President Barack Obama said that diplomacy was his preferred option to halt Iran’s nuclear program, though he didn’t rule out military action. Top Israeli officials also said last week that use of force against Iran remains an option.


Iranian officials are set to meet Oct. 1 in Geneva with representatives of the five permanent UN Security Council members and Germany. The group is seeking to determine whether Iran is willing to limit its nuclear activities, which several western nations claim are aimed at developing weapons.


Obama said yesterday he remains open to “a serious, meaningful dialogue” with Iran.


The country first must “cooperate fully” with international arms inspectors and “take actions to demonstrate its peaceful intentions,” the president said in his weekly radio and Internet address.


http://www.xinhuanet.com/english/ylhwq/index.htm Special Report: Iran Nuclear Crisis


India raises nuclear stakes
By James Lamont in New Delhi and James Blitz in London
Published: September 27 2009 22:30 | Last updated: September 27 2009 22:30
India can now build nuclear weapons with the same destructive power as those in the arsenals of the world’s major nuclear powers, according to New Delhi’s senior atomic officials.


They said India had built weapons with yields of up to 200 kilotons, which would be considered a “proper strategic deterrent” by the global community. A nuclear weapon above 50 kilotons is considered high yield. India’s enhanced capability gives it a considerable edge over Pakistan, its nuclear-armed arch-rival.
Read this news on FT.com - http://www.ft.com/cms/s/0/d63f3a70-ab90-11de-9be4-00144feabdc0.html?nclick_check=1


http://online.wsj.com/article/SB125417342102747375.html?mod=rss_whats_news_us 
New Sanctions Against Iran Seem More Likely 

http://www.rttnews.com/Content/TopStories.aspx?Id=1077094&Category=Top%20Stories&SimRec=1&Node=B1 Iran Developing Second Uranium Enrichment Plant Capable Of Making Nuclear Bomb 


U.S., Allies Seek New Ways to Sanction Iran http://online.wsj.com/article/SB125417342102747375.html?mod=rss_whats_news_us


Iran's missiles are ‘ready to destroy Israel’ http://www.timesonline.co.uk/tol/news/world/middle_east/article6851981.ece


Iran May Quit Nuclear Treaty If Geneva Talks Fail (Update1) 
By Ali Sheikholeslami

Sept. 29 (Bloomberg) -- Iran may end its participation in the global nuclear Non-Proliferation Treaty if talks this week fail to resolve the international dispute over the country’s atomic development, a member of the parliament’s National Security and Foreign Policy Committee said.

The West has always had a “carrots and sticks” approach to Iran, said lawmaker Mohammad Karami-Rad, who urged the powers to “end their excuses and negotiate on significant issues,” the state-run Islamic Republic News Agency reported. “If Iran remains under Zionist pressures and U.S. bullying and if the 5+1 talks fail, the parliament will take clear stands, such as quitting the NPT,” he said, referring to Israel and the five permanent members of the UN Security Council plus Germany
http://www.bloomberg.com/apps/news?pid=20601087&sid=aFWYTVL7C4ag