Nifty ends 114 pts lower; IT stocks take a beating Indian markets ended sharply lower near psychological resistance levels Friday, as investors booked profits on concerns of global economic recovery. According to analysts, investors were also garnering funds for the Coal India IPO. At open, indices extended overnight losses due to lack of support from Asian peers. The decline was led by IT stocks after Infosys Technologies announced second quarter results and noted challenges in global economic environment and volatility in currency markets. “Infosys revised 24-25% growth for revenue in US$ terms upward by 3.6% to US$5975 million, against our expectation of 21-23% year on year growth. Infosys has revised rupee EPS guidance by 1.4% to Rs115-117, a growth of 5.5-7.4% YoY inline with our. For Q3FY11, Infosys guided for 4% QoQ revenue growth to US$1555 and EPS guidance of Rs29.63 in rupee terms. We reiterate “BUY” rating with a target price of Rs 3250,” brokerage PrabhudasLilladher said in a report.
Infosys Technologies, Q2 FY11 results reflect the improvement in the recovery of demand from the US and the Europe. The company is seeing an improved traction in Retail, BFSI and Energy & Utility verticals among its US clients. Also, Europe is witnessing an uptick in demand with an incremental spending in Manufacturing, BFSI and Retail segments. In Europe, manufacturing has shown a healthy growth particularly in Switzerland, Germany and France as companies attempt to achieve cost efficiency through better systems. During the quarter, growth was led by Retail segment where in Infosys caters to 8 out of the top 10 retailers in US and 5 out of the top 10 retail companies in Europe.” The company has won 9 transformational which few are in excess of USD 100 million. Attrition has declined on a sequential basis, but it still remains a concern and Infosys plans to hire around 40,000 employees during FY 2011 to build up capacity in expectation of an increased demand in future. Overall, the Management remains optimistic in short term and have a cautious view over the long term as budgets for FY 2012 are yet to be finalized. The exchange rate remains a major concern as the recent appreciation of rupee will impact the company’s profitability in near term. Hold Infosys Technologies; target of Rs 3125: Nirmal Bang
Headline inflation increased to 8.62% in September from 8.51% in August on the back of increasing food prices, raising the prospect of another round of hike in key rates when the RBI reviews its policy on November 2. Government data showed food inflation going up marginally by 0.13 percentage points to 16.37% for the week ended October 2 on higher prices of vegetables and milk. But despite the rise, the headline inflation remained in a single digit for the second consecutive month though it is still not within the RBI's comfort zone. Headline inflation had hovered over 10% for five months, the figure for which has been revised upwards to 10.31% from the provisional estimate of 9.97% Inflation up at 8.62% in Sept
How Tata Aria fares against Toyota Fortuner and Ford Endeavour Tata Motors has a major task at hand—to distance itself from the tag of being the brand preferred by the cab industry. Though it might be financially quite plum for the company, after a stage one runs after brand image and value. And with Aria, its latest crossover, it’s the brand value and positioning which the company intends to change. From being the taxi driver’s first choice it wishes to become the rich man’s ride.