INTROSPECTION ON INFOSYS RESULT

Ultimately the tension is over, Infosys result is out. though the result is not bad enough, but the concern is about the guidance for the next quarter. The guidance is based on the present rupee valuation and any appreciation of rupee may hamper its earnings. Many market observers are really upset by it and the stock reacted by going down by almost 4% at 2:15 PM today and pulled the entire IT pack with it. The major downward puller of Sensex today is Infosys.

Infosys management squarely put the blame on appreciating rupee and came out as: “This is an extraordinary quarter as the rupee moved by 7%. We assumed a guidance of 43.10 earlier, now the rupee average for the first quarter is 46.6. We have lost around Rs 287 crore in revenues for the first quarter. For the whole year, from the guidance we would have lost around Rs 1,000 crore. So, it has been an extraordinary quarter and that’s why we have revised the rupee guidance for the full year” V Balakrishnan, Chief Financial Officer, Infosys .

Market is certainly not happy with the explanation, and probably trying to put the money in different sector where more than 20% growth is possible in the next quarter. Pundits are not writing the stock off, and have enough confidence in it, as it was exhibited in past. JP Sinha of Ambit said "The fundamentals are still intact and the entire fall is led by the rupee, which has appreciated by almost 6.5%. I am not willing to write it off and it is a good time to buy."

Now it is introspection time for small investors. To put more money or come out of the IT pack I consider there are still many milestones to achieve by the Indian IT Industry. To identify I started to look at the earning estimated put up by Broker Houses for my stock HCL Technology . The findings are below from indiaearnings.com

ABN AMRO : net profit is seen down 11.2% at Rs 267.5 crore (Rs 2675 million), QoQ. During the same quarters its revenues are seen up 0.9% at Rs 1590.8 crore (Rs 15908 million).

M Oswal :net profit is seen up 1.4% at Rs 336.5 crore (Rs 3365 million) YoY. During the same quarters its net sales are seen up 2.2% at Rs 1611.2 crore (Rs 16112 million) in the corresponding quarter previous year

JP Morgan: net profit is seen up11.3% at Rs 347.4crore (Rs 3474million), QoQ. During the same quarter its net sales are seen up 0.9% at Rs 1590.8crore (Rs 15908million) QoQ. net profit is seen up 24.9% at Rs 376.1 crore (Rs 3761 million) versus Rs 301.2 crore (Rs 3,012 million) QoQ. During the same quarters its revenues are seen up 2.2% at Rs 1611.3 crore (Rs 16,113 million) versus Rs 1577.1 crore (Rs 15,771 million) in the previous quarter.

I was about to leave the IT scene today then suddenly I saw this.

There is a major accumulation of HCL Technology today. Lets wait till the result of HCL Technology is out, risk taking appetite is neccessary in Stock Market. I'll keep a stop loss at around Rs. 330/-.