Infosys makes the bear run for cover

Mumbai: Though suffering under a tight bear-hug in the stock market, the Indian software major Infosys sprung a surprise last week by announcing an interim dividend of 150 per cent of the shares face value.

Ever since it announced its second-quarter results, which showed a 45.74-per cent rise in sales and a 30.87-per cent growth in net profit, Infosys has been on the forefront of the charge against the bear. The Sensex moved up by 164.97 per cent in just three days after Infosyss announcement.

Is the bear, which had gripped the Indian bourses, on the run?

The bear had been mauling Infosys in the past one year, during which the companys stock price plummeted from an all-time high of Rs 14,000 to a low of around Rs 2,000. Infosys was not the only company to bear the brunt; stocks of other technology companies too witnessed a steep fall.

When the terror attacks on the World Trade Center and the Pentagon on 11 September shook the world markets, sentiment in the Indian market too became gloomy with the fear that the bear was bound to tighten its grip further.

But on 10 October, Infosys announced its second-quarter results that made the bear run for cover. Till then, market players did not believe in what Infosys chairman N R Narayanamurthy and managing director Nandan Nilekeni were projecting about their companys growth prospects.

Narayanamurthy and Nilekeni had been maintaining, before the 11 September terror attacks, that their companys growth for the fiscal 2002 would be in the range of 30 to 35 per cent.

The companys second-quarter results proved them right. Against the general expectations of 20 per cent, Infosys posted a 45.74-per cent rise in sales at Rs 650.13 crore. Its net profit of Rs 201.56 crore was higher by 30.87 per cent. In the previous years second quarter, the company had posted sales at Rs 446.10 crore and the net profit at Rs 154.01 crore.

To the investors delight, Infosys declared a higher interim dividend of Rs 7.50 per share with a face value Rs 5, compared to the Rs 2.50 per share in the corresponding period of the previous year.