Infosys hits record high, rally seen limited
Friday, 16 April 2010
MUMBAI, Apr 15 (Reuters): Shares in Infosys Technologies hit an all-time high Thursday after India's No 2 software services exporter had issued a strong sales forecast that indicated a healthy demand outlook for outsourcing services.
But some analysts cautioned the share gains in Infosys and rivals Tata Consultancy Services and Wipro were unlikely to be sustained as a stronger rupee and rising wages threaten margins.
On Tuesday, Infosys had put out a better-than-expected sales forecast for the year to next March suggesting a recovery for India's $60 billion software services sector, prompting investors to pile into information technology stocks.
Trading in Infosys shares was more than double normal levels, after markets were closed Wednesday for a public holiday. Infosys, whose customers include Goldman Sachs, BT Group and BP, forecast its fiscal 2011 revenue would increase 16-18 per cent in US dollars, better than most analysts had predicted.
Infosys shares, valued at $36 billion, rose as much as 1.5 per cent to a record Rs 2,823.80 in a slightly firmer Mumbai market. The IT sector index also rose 1.5 per cent and is close to its life high set in February 2007.
"We believe most of the positives are already priced in (and) there is a small upside from here," said A V Srikanth, executive director of private wealth management at Anand Rathi.
But some analysts cautioned the share gains in Infosys and rivals Tata Consultancy Services and Wipro were unlikely to be sustained as a stronger rupee and rising wages threaten margins.
On Tuesday, Infosys had put out a better-than-expected sales forecast for the year to next March suggesting a recovery for India's $60 billion software services sector, prompting investors to pile into information technology stocks.
Trading in Infosys shares was more than double normal levels, after markets were closed Wednesday for a public holiday. Infosys, whose customers include Goldman Sachs, BT Group and BP, forecast its fiscal 2011 revenue would increase 16-18 per cent in US dollars, better than most analysts had predicted.
Infosys shares, valued at $36 billion, rose as much as 1.5 per cent to a record Rs 2,823.80 in a slightly firmer Mumbai market. The IT sector index also rose 1.5 per cent and is close to its life high set in February 2007.
"We believe most of the positives are already priced in (and) there is a small upside from here," said A V Srikanth, executive director of private wealth management at Anand Rathi.