Infosys Net Rises 16%; Weak Indian Monsoon

Trupti Mehta
10 Jul, 2009
New York City

North India recorded weakest monsoon rainfall in June in the last 83 years. Industrial production in May increased 2.7% after April data was revised lower to increase of 1.2% from 1.4%. Infosys earnings increased 18% in the fiscal first quarter and increased the lower range of its earnings guidance.

[R]5:00 PM Mumbai, 7:30 AM New York – North India recorded weakest monsoon rainfall in June in the last 83 years. Industrial production in May increased 2.7% after April data was revised lower to increase of 1.2% from 1.4%. Infosys earnings increased 18% in the fiscal first quarter and increased the lower range of its earnings guidance.[/R]

Monsoon rains in North India are running 8% below long term historic average and June rainfall was the worst in 83 years. The farm output is likely to be affected if July rains are also below the long term trend.

The Sensex index in India decreased 253.24 or 1.84% to 13,504.22 and CNX Nifty declined 92.65 or 2.3% to 3,988.30. Of the Sensex 30 stocks, 24 declined and 6 gained.

Trading on the BSE decreased to 4,585 crore rupees from 4,894.55 crore rupees and on the NSE fell to 14,945 crore rupees from 15,951 crore rupees.

Industrial production increased 2.7% in May after revised increase of 1.2% in April. The production data includes manufacturing, mining and utilities output. The closely watched manufacturing index gained 2.5%.

April production was lowered from 1.4% to 1.2%.

Gainers & Losers

Infosys increased 2.6% after it reported 18% increase in earnings. The IT services provider expects the annual revenues to be between $4.45 billion and $4.52 billion and earnings per share between $1.97 and $2.

Sales in the quarter increased 13% to 54.7 billion rupees and earnings increased 18% to 15.3 billion rupees. The earnings per share were 26.66 rupees a share compared to 22.75 rupees a share.

On better than expected earnings from Infosys, Wipro added 3.7% and TCS close higher 1.7%.

Reliance Industries dropped 5.4% to 1,751.80 rupees on weak trading and jitters ahead of Supreme Court deadline to receive information before July 20.

Triton Valve surged 4.5% after net profit increased 26.15% to 0.8 crore rupees in the first quarter.

Automakers declined on weak monsoon rains in North India. Maruti Suzuki increased 0.4% to 1,103.60 rupees, Mahindra & Mahindra declined 4% to 694 rupees and Tata Motors fell 4% to 269 rupees.

Colgate Palmolive India increased 4.2% to 681.90 after two blocks traded on the BSE at 678.65 rupees a share.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 3.78 or 0.04% to 9,287.28, Hang Seng index in Hong Kong decreased 82.17 or 0.46% to 17,708.42, CSI 300 index in China higher 2.01 or 0.06% to 3,398.31. ASX 200 index in Australia increased 30.80 or 0.82% to 3,794.10. The FTSE Bursa KL Composite index in Malaysia closed higher 2.08 or 0.20% to 1,067.76.

The Kospi Index in South Korea decreased 2.27 or 0.16% to close at 1,428.62. SET index in Thailand closed lower 15.96 or 2.74% to 566.03 and JSE Index in Indonesia decreased 20.88 or 1.00% to 2,063.09. The Sensex index in India decreased 253.24 or 1.84% to 13,504.22.