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Merrill says Infy will beat own forecast

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CIOL Bureau
New Update

MUMBAI: Infosys Technologies Ltd., a leading Indian software services

provider, is likely to beat its revenue growth forecast of 30 per cent for the

year to March if first-quarter volume growth is sustained, Merrill Lynch said in

a report on Tuesday.

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The strength of revenue earned by providing service at client sites,

utilization rates and salary flexibility were positives for India's

second-largest software company by market value, the brokerage said after

Infosys posted its April-June results on Tuesday.

However, Merrill said Infosys' share price will be under pressure in the

near-term after management discussed billing rate pressures in detail for the

first time. It said near-term price triggers were weak but prospects could

improve after the US market stabilizes.

Merrill analyst Mitali Ghosh maintained her earnings per share estimate of Rs

118.57 for the year to March 31, 2002 and retained a "buy"

recommendation on the stock. Infosys earned Rs 94.76 per share in the past year

to March. "We maintain our profit estimates, though we will likely be fine

tuning volume and pricing assumptions," the report said.

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Infosys' shares on Tuesday closed down 0.7 per cent at Rs 3,494.85 due to

concerns aroused by the company's comments about pricing.

At Tuesday's closing level, the shares were down 61 per cent from a 52-week

high of Rs 8,930 struck on September 12, but up 28.4 per cent from the 52-week

low of Rs 2,720 hit on April 12, when it forecast a sharp slowdown in growth

this year.

(C) Reuters Limited 2001.

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