Infy guidance, normal monsoon forecast drive 674 points Sensex surge

Quarterly result season kickstarted with Infosys’ Q4 result announcement on 15 April 2008. IT socks were in the limelight after Infosys’ decent guidance for FY 2009. Sensex gained in all the three trading sessions in the week. It was a truncated trading week. The market remained closed on Monday, 14 April 2008 on account of Dr. Babasaheb Ambedkar Jayanti. It remains closed on Friday,18 April 2008 on account of Mahavir Jayanti.

The BSE Sensex surged 673.56 points or 4.26% to 16,481.20 in the week ended Thursday 17 April 2008. The S&P CNX Nifty rose 180.6 points or 3.77% to 4,958.40.

The BSE Mid-Cap index rose 313.17 points or 4.8% to 6,836.39 in the week. The BSE Small-Cap index gained 449.93 points or 5.56% to 8,531.36.

Foreign institutional investors (FII)’ outflow in April 2008 totaled Rs 288.10 crore (till 15 April 2008). FII outflow in calendar year 2008 totaled Rs 11,720.90 crore (till 15 April 2008). Mutual funds (MF)s were net buyers of shares worth Rs 5 crore in this month, till 16 April 2008.

The 30-share BSE Sensex rose 346.02 points or 2.19% at 16,153.66 on Tuesday 15 April 2008. The battered stock market found a solace in IT bellwether Infosys Technologies' good future outlook. That triggered a broad-based rally in IT stocks. Healthcare and oil & gas stocks marched ahead as well. Ranbaxy Laboratories was the top gainer from the Sensex pack.

The 30-share BSE Sensex rose 90.53 points or 0.56% at 16,244.19 on Wednesday, 16 April 2008. The market, after trading in a narrow range through the day, eased from early highs, yet ended with decent gain. It was a rewarding session for IT stocks for second consecutive day after IT bellwether Infosys on Tuesday, 15 April 2008, gave a confident medium-term outlook. Small- and mid-cap stocks extended gains from the previous session. Positive cues from the global markets boosted domestic bourses.

The 30-share BSE Sensex rose 237.01 points or 1.46% at 16,481.20 on Thursday, 17 April 2008. Good buying interest helped market end on a strong note. IT and banking stocks were in demand throughout the trading session. Initial forecast of a near-normal monsoon this year by the Indian Meteorological Department boosted market sentiments today besides positive global cues.

IT stocks galloped. India’s second largest IT exporter by sales Infosys gained 17.15% to Rs 1666.45 in the week. The company reported 1.46% rise in net profit to Rs 1249 crore on a 6.34% growth in revenue to Rs 4542 crore in Q4 March 2008 over Q3 December 2007 on 15 April 2008.

Infosys' operating profit rose 6.17% to Rs 1478 crore in Q4 March 2008 over Q3 December 2007. The core operating profit margin was 32.54%, slightly lower than 32.59% in Q3 December 2007.

Infosys has given guidance of a between 16.3% to 18.3% growth in earnings per share (EPS) to between Rs 92.32 to Rs 93.92 for the year ending March 2009 over the year ending March 2008. It has given guidance of a between 19.2% to 21.1% growth in revenue to between Rs 19894 crore to Rs 20214 crore for the year ending March 2009 over the year ending March 2008.

As per US GAAP, Infosys has given guidance of a 16.7% to 18.7% growth in earnings per American Depository Shares at between $2.31 to $2.35 for the year ending March 2009 over the year ending March 2008. It has given guidance of a between 19% to 21% growth in revenue as per US GAAP to between $4.97 billion to $5.05 billion for the year ending March 2009 over the year ending March 2008.

Tata Consultancy Services (up 10.21% to Rs 1000.90), Satyam Computer Services (up 8.25% to Rs 468.95) and Wipro (up 13.01% to Rs 459.20) edged higher in the week.

India’s largest engineering and construction firm by sales Larsen & Toubro remained flat at Rs 2776.20 in the week. On 16 April 2008, L&T signed an agreement with Tamil Nadu Government to set up an integrated shipyard complex with a total investment of about Rs 3000 crore in north Chennai.

India’s largest pharma company in terms of sales Ranbaxy Laboratories jumped 8.17% to Rs 479.80. On 15 April 2008, UK's second largest drugmaker, AstraZeneca Plc signed a settlement agreement in its Nexium patent infringement litigation against Ranbaxy. AstraZeneca said that under the deal Ranbaxy would be allowed to start selling a cheap, copycat version of Nexium on 27 May, 2014.

Diversified firm Grasim Industries gained 1.48% to Rs 2568.60. The company said on 15 April 2008 it has increased its stake from 25% to 45% in AV Cell Inc, a joint venture company in Canada for a total consideration of around Canadian dollar 6 million.

ICICI Bank (up 5.92% to Rs 835.20), State Bank of India (up 0.89% to Rs 1682.85), Reliance Industries (up 3.4% to Rs 2636.95) edged higher in the week.

The Indian crude oil basket hit a record high of $104.63 per barrel on Monday, 14 April 2008. The price has averaged $101.23 per barrel in this month so far compared with $99.76 per barrel in March 2008.

The wholesale price index rose 7.14% in the 12 months to 5 April 2008. This was slower than the previous week's annual rise of 7.41%.

The annual monsoon rains in India are likely to be near normal at 96%-104% of the long-term average in 2008, Science Minister Kapil Sibal said on Wednesday, 16 April 2008. According to a recent forecast by Columbia University’s International Research Institute for Climate & Society (IRI), rains will be good in the first half of the four-month monsoon season in India. The monsoon rains usually fall from June to September.