IT sector set for BSE m-cap honours

Buying binge pushes up valuations across Asia

The information technology (IT) sector is once again inching up to the number one position in terms of market capitalisation (m-cap) on the Bombay Stock Exchange (BSE).

The IT sector's m-cap as on September 14, 2004, at Rs 1,88,131 crore is now close to that of the leader "" the refinery sector (Rs 1,89,170 crore). The banking sector is at the number three position, with a m-cap of Rs 1,19,879 crore and the pharmaceutical sector at number four with a m-cap of Rs 90,457 crore.

The IT sector has been able to recover lost ground and come to almost a striking distance of the refinery sector after a wave of buying in IT stocks pushed up valuations all across Asia. 
 

Top 10 firms in terms of market capitalisation	M-cap in Rs crore
	Sep 14, '04	Gain*
Refineries	1,89,170.07	1,580.65
Information technology	1,88,131.13	9,990.86
Banks	1,19,878.59	1,504.58
Pharmaceutical	90,457.35	5,279.19
Diversified	90,059.23	2,338.53
Telecommunication	43,623.01	1,498.24
Personal care products	39,011.51	2,104.36
Steel/composite/alloys	34,002.29	775.63
Power	29,901.52	130.60
Cigarettes	27,722.16	998.88
*Over September 1, 2004

As a result, the sector was the largest gainer in capitalisation since September 1, 2004, adding around Rs 10,000 crore in September alone. The total m-cap of IT stocks has thus increased almost six per cent (Rs 9,991 crore) from Rs 1,78,140 crore on September 1 to Rs 1,88,131 crore on Tuesday, while the m-cap of the 10 listed refinery companies inched up marginally by 0.84 per cent (Rs 1,581 crore) from Rs 1,87,589 crore to Rs 1,89,170 crore over the same period.

Frontline stocks such as Infosys Technologies, Wipro, Satyam Computer Systems, Tata Consultancy Services (TCS) and HCL Technologies were the major drivers for the IT sector.

The IT sector has been witnessing good times with a jump in business on the back of strong volume growth due to outsourcing demand, and stable billing rates. Infosys and Satyam have revised their 2004-05 earnings and revenue forecast upwards at the time of announcing the June quarter results in July 2004.

Among individual companies, Infosys was the largest gainer, adding Rs 3,125 crore to the total IT m-cap in the current month. The total m-cap of the company increased from Rs 42,124 crore to Rs 45,250 crore. Wipro was the second largest contributor, adding Rs 1,741 crore to the total m-cap, from Rs 40,262 crore to Rs 42,003 crore.

Satyam gained Rs 1,600 crore in m-cap, to Rs 12,399 crore, TCS added Rs 1,323 crore at Rs 48,569 crore, HCL Technologies added Rs 870 crore to Rs 10,307 crore, MphasiS BFL added Rs 255 crore to Rs 2,209 crore and Moser Baer added Rs 282 crore at Rs 2,357 crore.

In the same period, the Oil and Natural Gas Corporation's m-cap declined by Rs 649 crore to Rs 1,01,241 crore. MRPL's total market value declined Rs 70 crore to Rs 7,685 crore, Kochi Refineries by Rs 48 crore to Rs 2,335 crore and Petronet LNG down Rs 45 crore to Rs 1,770 crore.

However, Indian Oil Corporation's m-cap increased by Rs 1,845 crore to Rs 49,693 crore, HPCL up Rs 310 crore to Rs 11,139 crore and BPCL up Rs 197 crore to Rs 10,850 crore.

Other technology companies which added more than Rs 50 crore market capitalisation to the overall IT sector during the period include iGate Global Solutions which added Rs 100 crore to Rs 788 crore and i-flex solutions added Rs 81 crore to Rs 4,581 crore and Polaris Software Rs 76 crore at Rs 1,502 crore, Aftek Infosys Rs 65 crore at Rs 548 crore and Financial Technologies Rs 55 crore at Rs 323 crore.