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Sensex soars, led by Wipro, Satyam earnings

Sensex soars, led by Wipro, Satyam earnings
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First Published: Fri, Apr 20 2007. 02 27 PM IST
Updated: Fri, Apr 20 2007. 02 27 PM IST
By Ashok Bhattacharjee, Bloomberg
New Delhi: India’s benchmark stock index advanced, as higher-than-estimated earnings at Wipro Ltd. and Satyam Computer Services Ltd. eased concern that an appreciating rupee may erode the profits of software exporters.
“Big technology companies are not only hedging against risks stemming from currency fluctuations, but are also broadening their revenue base by adding a diversified list of clients,” said Dipak Acharya, who manages the equivalent of $19 million in stocks, including shares of Satyam, at BOB Asset Management in Mumbai. “Technology stocks are looking good.”
The Bombay Stock Exchange’s Sensitive Index or Sensex climbed 231.88, or 1.7 %, to 13,851.58 as of 11:15 a.m. local time. A measure of technology stocks climbed by 1.7 %, according to the website of the exchange. The S&P/CNX Nifty Index on the National Stock Exchange gained by 1.3 % to 4047.45.
Satyam, the nation’s fourth-largest software exporter, jumped by Rs21.4, or 4.8 %, to 469.25. The company said profit climbed by 38 % as it won more orders from larger customers.
Net income rose to Rs3.94 billion ($94 million) or Rs5.83 a share in the three months ended 31 March, from Rs2.85 billion or Rs4.23 a share a year ago, the Hyderabad-based company said in a statement. That exceeded the Rs3.54 billion median estimate of 11 analysts surveyed by Bloomberg News.
Technology Stocks Gain
Wipro, the nation’s third-largest computer-services provider, gained Rs8, or 1.4 %, to 586.9. The company posted its seventh consecutive quarter of record profit and sales. Net income in the three months ended 31 March rose by 44 % to Rs8.61 billion, from Rs5.97 billion a year earlier, Bangalore-based Wipro said in a statement. Profit beat the Rs7.83 billion median estimate of 11 analysts surveyed by Bloomberg News.
“There were concerns about currency fluctuations, but confidence in technology hadn’t vanished,” said Sandeep Shenoy, head of equities strategy at Pioneer Intermediaries Pvt. In Mumbai. “Of course, the impact of the appreciating rupee will be evident in the earnings of the quarter ending in June.”
Rupee headed for a seventh week of gains, the longest winning streak in more than two years, on speculation the second-fastest pace of growth among major economies will lure investment from abroad.
Rupee Appreciates
The rupee rose by 1.3 % this week to 41.945 against the dollar as of 9:28 a.m. in Mumbai, according to data compiled by Bloomberg. The currency climbed to 41.645 on 17 April, the highest intraday level since June 1998.
Indian software companies generate the majority of their revenue overseas so a stronger rupee reduces the value of the companies’ earnings when converted back into local currency.
Overseas investors bought a net $145.4 million worth of Indian shares on 18 April , according to the Securities & Exchange Board of India’s Web site.
The following shares rose or fell. Stock symbols are in brackets after company names.
Indiabulls Real Estate Ltd. (IBREL IN) advanced Rs9.65, or 3.4 %, to 295.45. Overseas investors of the property developer separated from Indiabulls Financial Services Ltd. can own all of the company’s shares, the Indian central bank said yesterday.
Infosys Technologies Ltd. (INFO IN) gained by Rs26.35, or 1.3 %, to 2066. The nation’s second-largest software exporter plans to open an information technology services delivery centre in Manila, Business Line reported, citing Amitabh Chaudhary, managing director of Infosys BPO Ltd. The centre will be set up over the next two quarters and employ 300 people to service clients based in the US, the newspaper reported.
Oil & Natural Gas Corp. (ONGC IN) climbed by Rs9.2, or 1 %, to 904.55, while Indian Oil Corp. (IOCL IN) gained by Rs4.8, or 1.2 %, to 411.6. Oil & Natural, the nation’s biggest energy explorer and fuel retailer Indian Oil will this week tell Algerian officials they want to drill for energy in the North African state, the El Moudjahid newspaper reported, citing an Algerian government statement.
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First Published: Fri, Apr 20 2007. 02 27 PM IST
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