Moneycontrol Bureau
The market was a picture of strength today. Strong global cues and the positive surprise from Infosys helped the frontline indices clock a 2.5% rally.
The rally was also reflective of global cues as the sentiment across markets perked up after Eurozone leaders pledged to unveil a plan to solve the region's sovereign debt crisis soon.
But the key trigger for today's rally was definitely the positive Infosys numbers.
For the second quarter of the fiscal, Infosys has delivered dollar revenue of USD 1,746 million...the 4.5% revenue growth helped Infy meet the top end of its own guidance.
The bottom-line too came in above estimates, rising 11% to Rs 1,900 crore.
Infosys has marginally marked down FY12 dollar revenue guidance to 17-19%, but on the other hand it has significantly raised rupee EPS guidance to 143-145.
We expected Infosys to have a decent second quarter, but they have come up with what one could call excellent second quarter with a robust growth, said portfolio manager PN Vijay.
On the spurt in IT index, Vijay felt, people may be realising that IT is probably not facing the kind of headwinds from global markets as one thought. “But then, if you look at the EPS in the rupee terms that Infy is projecting, they are probably at within 18 to 19 times their current earnings, which is a historic low for Infosys,” he said.
Ultimately, Bhavin Shah, CEO of Equirus Securities believes, it is going to boil down to what happens in terms of growth beyond the current year for Infosys.
"Even if we do not have a global recession kind of a situation, there is a possibility of lower economic growth (ahead)," he said.
However, the blemish of the day came in from the industrial side. The August industrial growth slowed down to 4.1% versus street expectations of 4.8%. IIP data released today, shows that the slowdown is widespread and all sectors — capital goods, consumer goods, mining and intermediate goods — have shown dismal growth.
The government is not too enthused by the low figure. Finance minister Pranab Mukherjee admitted that IIP slowdown may hit GDP growth in the second quarter. But economic affairs secretary R Gopalan is still hopeful of a turnaround.
We are seeing a genuine slowdown, said Vijay, who feels, the second quarter IIP data was quite shattering. "We have had problems and I think what's getting reflected is a lag effect of the steep increase in interest rates and various other factors," he pointed out.
However, he added, the positive thing about the Indian economy is that good monsoon season pretty much washes away most of our problems.
"You get a pretty strong ride up in the second quarter because the money comes into the rural economy and even atleast things like consumer durables bicycles, two-wheelers etc, and most of the festivals are in the second half of the financial year in India...you could see a pretty strong bump up."
....more info
The market was a picture of strength today. Strong global cues and the positive surprise from Infosys helped the frontline indices clock a 2.5% rally.
The rally was also reflective of global cues as the sentiment across markets perked up after Eurozone leaders pledged to unveil a plan to solve the region's sovereign debt crisis soon.
But the key trigger for today's rally was definitely the positive Infosys numbers.
For the second quarter of the fiscal, Infosys has delivered dollar revenue of USD 1,746 million...the 4.5% revenue growth helped Infy meet the top end of its own guidance.
The bottom-line too came in above estimates, rising 11% to Rs 1,900 crore.
Infosys has marginally marked down FY12 dollar revenue guidance to 17-19%, but on the other hand it has significantly raised rupee EPS guidance to 143-145.
We expected Infosys to have a decent second quarter, but they have come up with what one could call excellent second quarter with a robust growth, said portfolio manager PN Vijay.
On the spurt in IT index, Vijay felt, people may be realising that IT is probably not facing the kind of headwinds from global markets as one thought. “But then, if you look at the EPS in the rupee terms that Infy is projecting, they are probably at within 18 to 19 times their current earnings, which is a historic low for Infosys,” he said.
Ultimately, Bhavin Shah, CEO of Equirus Securities believes, it is going to boil down to what happens in terms of growth beyond the current year for Infosys.
"Even if we do not have a global recession kind of a situation, there is a possibility of lower economic growth (ahead)," he said.
However, the blemish of the day came in from the industrial side. The August industrial growth slowed down to 4.1% versus street expectations of 4.8%. IIP data released today, shows that the slowdown is widespread and all sectors — capital goods, consumer goods, mining and intermediate goods — have shown dismal growth.
The government is not too enthused by the low figure. Finance minister Pranab Mukherjee admitted that IIP slowdown may hit GDP growth in the second quarter. But economic affairs secretary R Gopalan is still hopeful of a turnaround.
We are seeing a genuine slowdown, said Vijay, who feels, the second quarter IIP data was quite shattering. "We have had problems and I think what's getting reflected is a lag effect of the steep increase in interest rates and various other factors," he pointed out.
However, he added, the positive thing about the Indian economy is that good monsoon season pretty much washes away most of our problems.
"You get a pretty strong ride up in the second quarter because the money comes into the rural economy and even atleast things like consumer durables bicycles, two-wheelers etc, and most of the festivals are in the second half of the financial year in India...you could see a pretty strong bump up."
....more info