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

To: Mohan Marette who wrote (4215)	5/5/1999 8:59:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 12475

India Lacking in Pure Net Firms By Dean Tomasula (Courtesy:Multex Investor Network) multex.com Despite producing about 68,000 software professionals annually, India lacks one crucial piece of the high-tech puzzle — it is sorely lacking in pure Internet companies. The vast majority of the country's Internet traffic heads straight for U.S. sites like YAHOO!(YHOO) and HOTMAIL, bypassing the home-grown portals Rediff on the Net (http://www.rediff.com) and India World Net (http://www.indiaworldnet.com). But with the Indian government set to pass legislation governing digital signatures and payment mechanisms on the Internet, analysts expect to see a number of Internet-based companies register for IPOs during the next two years. In fact, analysts expect to see the country's first Internet IPO in FY00. Some of the country's largest technology companies have seen the writing on the wall and are poised to take advantage of this expected growth. A number have announced plans to expand from their traditional IT and software markets into the market for Internet services and applications. INFOSYS TECHNOLOGIES (National Stock Exchange of India: INFOSYSTCH; NASDAQ: INFY), India's leading IT firm, has a market cap of Rs89 billion ($2.1 billion), and is planning to expand into Internet consulting and re-engineering in FY00. The Internet accounted for 4% of the company's revenue in FY99. "We are positive about the company's foray into Internet consulting and re-engineering efforts, given the potentially strong growth rates in each of these segments," said V.S. Hariharan, an analyst with BNP Prime Peregrine in India. Mr. Hariharan, in a report dated April 23, rated the stock of INFOSYS TECHNOLOGIES an OUTPERFORM based on its FY99 EPS of Rs40 ($0.93) and its estimated EPS for FY00 of Rs66 ($1.54). In the report, Mr. Hariharan said he expects the company to post earnings growth of 63% in FY00, 54% in FY01 and 53% in FY02. With its strong focus on emerging technologies and the Internet, PSI DATA SYSTEMS (NSE: PSIDATASYS) is considered a "high growth Internet play." The company, which has a market cap of Rs4.2 billion ($99 million), is expected to report EPS of Rs16 ($0.37) for FY99 and EPS of Rs32 ($0.74) for FY00. Mr. Hariharan on April 23 initiated coverage of PSI DATA SYSTEMS with an OUTPERFORM rating, based on the company accomplishing earnings growth of more than 80% since FY98. "PSI has chosen emerging technologies as the area it will concentrate on, with the Internet being the focus of all new initiatives," said Mr. Hariharan. He noted that "the most exciting development" at the company was its launch of a series of Internet products based on AxCIMS, a 100% Java application development framework. Traditionally a pure software services company, NIIT (NSE: NIIT) is repositioning itself as a client/server software and online training company. With EPS growth expected of 44% during the next four years, Mr. Hariharan rates NIIT's stock an OUTPERFORM. EPS for FY99 is estimated to be Rs43 ($1.00) and Rs62 ($1.44) for FY00. The company has a market cap of Rs65 billion ($1.5 billion). The company is restructuring its software services business along vertical industry segments like manufacturing and financial services and specializing in horizontal technology segments such as client/server and network environments.