What will be the outcome of Infosys’s Second Quarter results on Oct 10, ‘08?

Analyst:
Gurukrupa Capital
E-mail: contact@gurukrupacapital.com
www.GurukrupaCapital.com


Stock Info:
Company Name: Infosys Technologies
Sector: IT
Market Cap (Rs cr): 81,559
Beta: 235.70
52 Week High / Low: 2140 / 1212
Face Value (Rs): 05
P/E: 17.34


Shareholding as on (March 31, 2008) (in %)
Promoters: 16.51
Institutions: 7.9
Public & Others: 18.72
Foreign: 53.25
Corporate Bodies: 3.12

Infosys Technologies Limited INFY, a world leader in consulting and information technology services, will announce results for its Second Quarter ending September 30, 2008 on Friday, October 10, 2008, Indian Standard Time (IST) (on the night of Thursday, October 09, 2008, US Eastern Time (ET)). The results will also be available on the Infosys web-site. (Source: www.infosys.com)

Following the release, Infosys CEO and Managing Director, Mr. S. Gopalakrishnan; COO, Mr. S.D. Shibulal and CFO, Mr. V. Balakrishnan and other members of senior management will comment on the company's performance. This will be telecast by CNBC-TV 18 to its viewers as a part of its “Boardroom” series direct from Bangalore at 10:30 a.m. IST on October 10, 2008 (this will not be telecast in the US). An archive of this event can be accessed at www.infosys.com after 2:00 p.m. IST on October 10, 2008 (at 4:30 a.m. US ET on October 10, 2008). (Source: www.infosys.com)

The following are the prospects and analysis for the highlights of second quarter results.
As we all know that the entire IT sector has been passing through the tunnel since January 2008. Company has shown consolidated net profit of Rs 1079 crore (including tax write back) in the first quarter of FY08 as against Rs 1,144 crore in the previous quarter, down 5.68%, this is above everyone’s expectation.

However global weaknesses and especially the weakness of American Economy affect our domestic IT industry, Infosys will be able to stand at the same position by showing its financial results.

As compared to previous quarter’s profits, Company is likely to show slight rising scale in Consolidated Gross Profit. After deduction of Direct, Indirect and other major Taxes, Company will stand at minimum 19 to 23 % profits in total Net Revenues. Thus, Consolidated revenues are expected to be in the range around 20% net Profits. Consolidated earnings per American Depositary Share are expected to be in the range between 15.05% – 17.67%.

Employee’s enhancement scheme will also be improved and by the end of December Company will have 17 to 19 % increases in total employee capacity.

Long term Investors shall gain the target price of 2121.20 per share. However this target can be triggered by the end of January 2009, Investors must put the stop loss at the point of 1386.86.

Although the global economic environment continues to remain uncertain and could impact IT sector in the short term, we expects several opportunities in Infosys Technology.

Guru’s Grace,
The Gurukrupa Capital Team