Software firms’ profits to increase by 50% in 2000-01

CHENNAI: India's top software service firms are expected to show an earnings

growth of over 50 per cent in the year to March 2001 despite a marginal decline

in margins, the fund manager at Kothari Pioneer's (KP) Infotech Fund said on

Tuesday.

Profits of India's top-rung software firms had grown by more than 100 per

cent in 1999-2000.

R Sukumar, who manages the KP Infotech Fund, told Reuters that while the

shakeout among Internet firms in the US was likely to have a small impact on the

overall sentiment of technology firms, Indian information technology firms had

not seen any significant slowing of demand.

"There is a little bit of a negative sentiment as compared to earlier

and one cannot see the margin expansion that one would have expected earlier,

but I still see 50 per cent plus earnings growth at the top firms," Sukumar

said.

He named Infosys, Wipro and HCL Technologies as among the top firms expected

to show good earnings growth. Last week, Credit Suisse First Boston downgraded

India's technology sector to neutral, citing concerns linked to a slowing US

economy. The sentiment hit software stocks hard.

(C) Reuters Limited 2000.