IT scrips sink despite good results

Despite encouraging quarterly results of IT companies like Infosys, iGate and Mastek, technology stocks have had a poor showing, with share prices falling between 2 to nearly 17 per cent, mainly due to global weakness in the sector, strengthening rupee and fears of slowdown in the US.

Back in India, the "muted guidance" or a sombre outlook by Infosys coupled with poor showing by Tata Consultancy Sservices, led to IT stocks taking a terrific beating.

Between April 11 and 19, since the first set of tech quarterly numbers started to come out, the BSE IT Index has fallen a whopping 8.41 per cent (in nine days) compared with the BSE Sensex which has fallen only 4.11 per cent during this period.

Contrary to popular perception that results have been bad, quarterly results of IT companies were by and large satisfactory and inline with expectations, according to the data furnished by the companies.

Seven out of the nine IT companies, which have declared results so far, had a positive growth in net profit for the quarter ended March 31, 2005 over the year-ago period.

Eight out of the 9 companies surveyed had a positive growth in sales revenue during the period in review.