BUY this stock for 20% gains in short term - Read Analysis

JSW Steel:
Present Price: Rs. 300
Projected Price: Rs. 360

The outlook for steel industry is looking extremely promising because of exceptionally strong growth in emerging economies and shifting  of basic steel making capacities from developing economies to emerging countries. JSW Steel is the third largest producer of steel in India manufacturing various flat steel products. Because of the company's robust business model it has shown tremendous resilience during periods when the steel prices have been sluggish. With the short term correction for the steel industry being over JSW looks the most promising bet in the current scenario. On the technical front, the stock breaks out of a bullish pattern once it closes above Rs.311. Buy at current levels and add aggressively once it closes above Rs.311.

IT pivotals leverage on Infosys Q2 numbers

Infosys Technologies heart warming numbers had a ripple effect on IT pivotals. Shares of Infosys were up 4.4% to Rs 1,950. Among other IT pivotals, TCS rose 2.9% to Rs 1,041, Wipro gained 2.3% to Rs 532, Satyam Computer advanced 2.8% to Rs 418.95 and HCL Tech rose 2.5% to Rs 566.

BSE IT sector index was up 159 points (3.5%), at 4,612.11. BSE IT index has risen since late July 2006 amid a correction here and there. From 3,745.26 on 21 July, it has risen 868.85 points (23%).

Announcements by Infosys, an IT bellwether, are regarded as a benchmark to gauge the scenario in the sector. Therefore, a broad-based surge was witnessed in IT pivotals following Infosys' strong guidance.

Infosys today reported a net profit of Rs 929 crore for Q2 September 2006 as per Indian GAAP, compared to Rs 606 crore for Q2 September 2005, a growth of 53.3%. Consolidated revenue rose 50.4% to Rs 3,451 crore from Rs 2,294 crore. The core operating profit margin (OPM) has inched ahead to 32.1% from 31.9%. On a sequential basis, OPM has risen from 29.5% of Q1 June 2006.

Infosys has revised upwards its EPS and revenue growth guidance for FY 2007 (year ending 31 March 2007). The company has forecast revenue of between Rs 13,853 crore and Rs 13,899 crore for FY 2007, transforming into projected year-on-year growth of 45.5 - 46%. EPS for FY 2007 is forecast at Rs 66, which transforms into a projected year-on-year growth of 46.6%.

Indian IT companies are benefitting from robust offshore outsourcing demand. In recent months, Indian IT majors won big deals. Further, a lot of projects coming in now are long term, unlike in the past when short term projects dominated.

Meanwhile, software companies are eyeing outsourcing deals on their home turf as banks and government departments step up spending on technology to cut costs and improve efficiency. Domestic spending on software and back-office services is expected to rise to $7-7.3 billion in the year ending March 2007, from $6 billion in the previous year, the National Association of Software and Service Companies (NASSCOM) said recently.

Infosys surges as Q2 results beat street

Infosys surged 4.4% to Rs 1,990, after reporting a 53.3% surge in Q2 September 2006 net profit as well as on revising upwards FY-2007 EPS and revenue guidance. The scrip hit a high of Rs 2,024. As many as 19,764 shares changed hands in the counter on BSE.

Infosys today reported a net profit of Rs 929 crore for Q2 September 2006 as per Indian GAAP, compared to Rs 606 crore for Q2 September 2005, a growth of 53.3%. Consolidated revenue rose 50.4% to Rs 3,451 crore from Rs 2,294 crore. The core operating profit margin (OPM) has inched ahead to 32.1% from 31.9%. On a sequential basis, OPM has risen from 29.5% of Q1 June 2006.

Both net profit and revenue has surpassed market expectations. Eleven brokerages had forecast between 37.7% to 43.3%, growth in Infosys' Q2 September 2006 net profit to between Rs 834.80 crore and Rs 868.50 crore, compared to Rs 606 crore in Q2 September 2005. Net sales was projected to expand between 44% and 46.9%, to Rs 3,293.30 crore and Rs 3,370.10 crore, compared to Rs 2,294 crore, in Q2 September 2005.

Infosys has revised upwards its EPS and revenue growth guidance for FY 2007 (year ending 31 March 2007). The company has forecast revenue of between Rs 13,853 crore and Rs 13,899 crore for FY 2007, transforming into projected year-on-year growth of 45.5 - 46%. EPS for FY 2007 is forecast at Rs 66, transforming into a projected year-on-year growth of 46.6%

Infosys Technologies added 45 new clients and 10,795 employees (net 7,741) in Q2.