Analysts bullish on corrected Infy stock

Despite the initial bearish sentiment that the technology trend-setter Infosys Technologies (Infy) for failing to meet the Street expectations in its performance for the first quarter ending June 2005 that brought down the price of stock by over Rs 100 intra-day, securities firms have maintained a `buy' call for the stock by afternoon.

However, the advise has a note of caution in the form of `after correction' in most cases.Leading securities firm Anand Rathi Securities has issued a `buy' on the stock to its clients after the correction in price immediately after the announcement of the result by the company in Bangalore early on Tuesday.

Citing reasons behind the call, the firm's analyst said, "Though the results were a bit disappointing when compared to built up expectations, the valuations got corrected immediately after the announcment. Being a leader in the technology sector stocks, it has every reason to believe that the company would improve its performance in the latter part of the fiscal.

"The guidance also points to an improvement in the future performance of the company from the present level. Thus, there is room for an upside in the next few quarters, the analyst added. Infy has posted a 37 prer cent jump in its net profit for the first quarter, against the market expactations which were a tad higher.

According to some market sources, the company has posted Rs 532 crore of net profit for the quarter against the market expectation of about Rs 540 crore. This has seen the stock price plunging by over 100 points during the day, though it has recovered some of the losses and settled at Rs 2219.95.Motilal Oswal Securities has issued a cautious `Buy' call on the stock.

The securities research firm has asked its clients to increase their exposure in the stock as it gets corrected over a period of time. The advise is backed by its perception that Infy has witnessed speculative buying over the last one month in its run up to this day.

"Unless some correction takes place the present level of pricing is unsustainable over the long run," the firm said.Stratcap Securities (India) has given a `Buy' advise to its clients after the stock was hammered during the day.

The firm is of the view that `from here on (from Q2) the momentum of revenues will be better for the company as the US companies, which were focusing on compliance issues till now, will turn to IT initiatives.

On the other hand, increase in guidance is a positive note, and the salary hike effect for the year would subside in the coming quarters resulting in improved margins, the analyst said.

An analyst with a leading securities firm said that all the negatives were discounted by the market by Tuesday afternoon, and as such we have advised our clients to invest for long-term appreciation and added "However, nothing of that sort can be expected in three or four months time."But Parag Parikh Securities was bullish on the stock from the beginning and felt that the perfromance was up to their expectations. "We were not surprised by the company's results.

Unlike others, we had not expected super normal profits of 40 per cent from Infy. We were of the view that over 30 per cent performance by infotech stocks was comparatively better than other companies and that makes them attractive," the analyst said.

The company has kept `Buy' advise at a price anywhere in 1900s.Infy said on Tuesday that the full-year earnings would increase 23.12-25.02 per cent to Rs 84.7-86 per share versus an earlier forecast for a 23-24.9 per cent rise, and revenue for the year up to March 2006 was expected to rise 25.49-26.95 per cent to Rs 8,947-9,051 crore, against an earlier forecast for a 24.7-26.6 per cent increase.

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Confidence booster

SECURITY FIRMS have maintained a 'buy' call for the stock by afternoon

THE GUIDANCE points to an improvement in the future performance of the

THE NEGATIVES were discounted despite the hammering suffered