Sensex in India Drops 1.6%; Infosys Plunges 10% on Weak Guidance

Devan Biswas
15 Apr, 2011
New York City

Stocks in Mumbai trading dropped after Infosys guided lower than expected growth in sales and revenues in the current quarter. The outsourcing company plunged as much as 10%. The latest read on wholesale inflation showed a decline to 11.40%.

[R]4:30 PM Mumbai – Stocks in Mumbai trading dropped after Infosys guided lower than expected growth in sales and revenues in the current quarter. The outsourcing company plunged as much as 10%. The latest read on wholesale inflation showed a decline to 11.40%.[/R]

The Sensex dropped 310.04 to 19,386.82 and Nifty index declined 86.95 to 5,824.55.

Of the 30 stocks in the Sensex index, 22 declined and 8 gained.

The rupee edged higher 1 paisa to Rs 44.94 and price of gold for ten grams was nearly unchanged and Rs 21,218.

Infosys, the leading outsourcing company guided lower than expected increase in sales and earnings. The company estimates earnings gain between 5.5% and 7.3% in earnings per share or between Rs 126.05 and Rs 128.21 in the current fiscal year.

The current quarter revenue is estimated to grow between 2.56% and 3.55% or revenues between $1.64 billion and $1.65 billion. For the year revenues are expected to increased between 15.4% and 17.3% or Rs 31,727 crore and Rs 32,270 crore.

The wholesale price index in India increased 1.3 to 190.6 from 188.2 for the previous week. For the year to the week inflation declined to 11.40% compared to 12.97% in the previous period.

Annual rate of inflation measured in wholesale price index decreased to 8.98% in March compared to 10.23% for a year ago. The index increased 1.4% to 148.0 from 146.0 in March. The inflation base was revised to fiscal 2004 from the base of fiscal 1993 since August.

Stock Movers

Infosys Technologies dropped 9% to Rs 2,988 after the outsourcing services provider said fiscal fourth quarter net increased 2.1% and sales increased 2.02%.

Development Credit Bank added 3.3% to Rs 58.90 after the company reported a turnaround in its latest quarterly report.

Mafatlal Industries soared 9.9% to Rs 221 on the talks that the company may sell its seven acre land plot in the central Mumbai for as much as Rs 750 crore to Piramal Realty and Sunteck Realty.

Reliance Industries Infrastructure Ltd declined 1.6% to Rs 673 after fourth quarter net declined 20% to Rs 4.35 crore and sales increased 70% to Rs 18.04 crore.

Dr Reddy’s Lab increased 1.3% to Rs 1,653.50 after the company launched generic drug for the treatment of allergic treatment and temporary treatment of nasal stuffiness.

Zuari Industries increased 1.3% to Rs 705 and Zydus Wellsness soared 4% to Rs 632.40.

Timken India soared 11% to Rs 203.90 and SKS Microfinance increased 4.6% to Rs 549.50.

CRISIL declined 1.4% after the company reported net profit increased 32.7% to Rs 45.89 crore and revenues increased 24.7% to Rs 178 crore in the quarter ending in March.