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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: ratan lal who wrote (5210)	7/20/1999 11:21:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

ANALYSIS-India software firms outlook seen mixed Ratan: We should have,eh? But can we short ADRs? =========================== By Y.P.Rajesh BANGALORE, India, July 20 (Reuters) - India's computer software industry has outperformed other sectors during the first quarter of 1999/2000 (April-March) but the outlook is mixed, analysts said on Tuesday. ''Barring a few companies our overall valuations (for the industry) is not very good,'' said Rajesh Iyer, analyst at Triumph International Finance. ''The story for this year will be that only a few companies with strong fundamentals will show good figures.'' Profits of software companies are expected to grow about 60 percent in 1999/2000 after rising more than 100 percent in 1998/99, analysts said. Results in the first quarter were mixed. Infosys Technologies Ltd (Nasdaq:INFY - news), the only Indian firm listed on Nasdaq, unveiled a whopping 156 percent rise in earnings growth in the three months ended June 30. But profits of BFL Software fell 17.4 percent. The results on July 9 fuelled a bull run in Infosys' stock that took it up 48.55 percent to a close of 5,518.75 on Monday. It retreated on profit-taking on Tuesday. Leading software firms which have already redeployed their programming strengths from fixing the Y2K computer bug to other businesses, particularly the e-commerce sector, will reap higher earnings growth, analysts said. Firms that have been tardy in moving away from the lucrative Y2K business towards other services will see growth slowing. ''Redeploying programmers from Y2K services to other services is very difficult for a lot of firms,'' Iyer said. ''So their billings will come down.'' Alroy Lobo, software analyst at Kotak Securities, said while he was bullish about the sector, he expected a lean business period between October and December when concerns about the ''Millennium Bug'' would be high around the world. ''Only some smart companies have filled up their order books for the entire year,'' he said. Net profits of nine leading software firms in the three months ended June 30 released over the last two weeks grew by an average of 68 percent against the year-ago period. In comparison the average net profit of 31 companies, including the nine software firms, rose by 15 percent. Results of software companies were mixed and contrary to expectations, analysts said. ''Companies which did not meet expectations are basically investing in marketing their non-Y2K services and this will take some time to bear fruit,'' one analyst said.