India Infotech Cheer

Business Standard reports cheer in the indian infotech market :

Infosys Technologies' first quarter results for 2004-05 have comfortably beaten the street, both on revenues and earnings. Far more significant, though, is the upward revision in its guidance for this fiscal.

According to the company's revised estimates, income growth for the full year is expected to be around 40 per cent, while earnings per share are expected to grow at 34 per cent. That's a healthy rate of growth.

Given the fact that the Infosys management has traditionally been very conservative about guidance, the markets will undoubtedly re-rate the company, especially as it trades at a forward price-earnings ratio of well below its annual earnings growth rate.

But Infosys' revised guidance also sends another strong signal to the market - a pointer whose implications go far beyond the effect on a particular stock.

Taken together with MphasiS BFL recent results and its management's upbeat assessment of prospects, the signal going out loud and clear is that the outlook for Indian software services has changed significantly for the better.

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