Infosys Technologies advanced on Monday on renewed buying support from institutions due to its attractive valuation.

By 11:55 IST, the stock of the Bangalore-based bellwether was up by 2.32% to Rs 4,401. A relatively higher volume of over 116,000 shares was recorded on the counter.

In last three sessions, the Infosys scrip rose by 4.62% from Rs 4,200.05 on 29 January 2003. Earlier, after the company announced its DQ 2002 results on 10 January 2003, till 29 January 2003, the scrip shed 12.4% from Rs 4,795 on account of selling pressure from investors, who had expected the company to post much better results. The fall was on concerns over the company's future bottom line growth. On a sequential quarter-on-quarter basis, its operating profit margin dropped by 2% to 34.8%, from 36.7%.

Monday's rise in the scrip was mainly due to institutional buying. As per market buzz, C L Securities was active on the counter. The optimism regarding the scrip was due to its attractive valuation as well as on hopes that the company's billing rates may show some stability and that revenue growth may improve substantially.

Last week, Infosys received the government's green signal to raise the American Depository Share component of its equity base to somewhere between 6.27% and 7.78%. The company currently has an ADS component of 3.25%. The idea behind the move to convert equity shares to ADS is to increase the liquidity of the Infosys stock. In December 2002, the Infosys board had approved the conversion of two to three million equity shares into ADS. The company's ADS are listed on the Nasdaq. Two Infy ADS are equivalent to one underlying equity share.

For the third quarter ended 31 December 2002, Infosys posted a 24.4% rise in net profit to Rs 256.31 crore (Rs 2.56 billion) on net sales of Rs 958.64 crore (Rs 9.58 billion). The net profit and net sales beat the company's own guidance, which had forecast income from software development services and products to somewhere between Rs 890 crore (Rs 8.9 billion) and Rs 904 crore (Rs 9.04 billion) and a net profit in the range of Rs 245-251.5 crore (Rs 2.45-2.51 billion). The company added 23 new clients in the December 2002 (DQ 2002) quarter.

Infosys has revised upwards its revenue guidance for FY 2002-03. Earlier, it had expected income from software development services and products to be between Rs 3,433 crore (Rs 34.33 billion) and Rs 3,467 crore (Rs 34.67 billion), translating into 31.9% to 33.2% growth on a year-on-year (y-o-y) basis. The company has now projected income in the range of Rs 3,578 crore (Rs 35.78 billion) to Rs 3,592 crore (Rs 35.92 billion), translating into a 37.4% to 37.96% growth on a y-o-y basis. It expects FY 2002-03 earning per share to be between Rs 144.70 and Rs 145, translating into 18.55% to 18.8% growth on a y-o-y basis.

BSE Code: 500209