IT stocks plunge as Infosys estimates lower growth in 2007-08

Mumbai, July 11 (PTI): Technology stocks fell like nine pins on the bourses today after Infosys, the country's second biggest software exporter, estimated lower-than-expected revenue and profit during 2007-08.

Infosys scrip fell 4.47 per cent or Rs 90.25 on the Bombay Stock Exchange to settle at Rs 1,929.70. Its bigger rival, Tata Consultancy Services, saw its shares dip 3.34 per cent of Rs 39.60 to Rs 1,146.90.

Shares of Wipro, the third-biggest software services exporter, declined two per cent to Rs 510.25, while the fourth largest player, Satyam fell 3.28 per cent to Rs 480.85. Overall, the IT index declined 3.34 per cent to close at 4,868.77 points from 5,036.99 yesterday.

Only two companies - I-Flex and Patni Computers - out of the total 12 stocks on the index managed to stay in the green.

The fall in IT stocks led the near 100-point decline in the BSE's benchmark Sensex, which settled below 15,000 after staying above the mark for two days.

Bangalore-based Infosys Technologies, however, reported better-than-expected results for the first quarter of this fiscal. Its consolidated net profit rose over 34 per cent to Rs 1079 crore and revenue grew 25 per cent to Rs 3,773 during April-June 2007.

The company estimated income is expected to be in the range of Rs 16,238-16,433 crore during 2007-08, with a growth rate of 16.9-18.3 per cent. In dollar terms, it expected consolidated revenue to be between 4-4.05 billion dollars, with a growth of 29-31 per cent in 2007-08.

Indian IT companies earn more than half of their revenues from the US market and have been facing a margin squeeze as the rupee has gained over 9 per cent against the dollar since the beginning of 2007.