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No Fear Factor

The technology sector, despite facing adversities, performed well in the last quarter. The top 5 companies of the sector were closely watched & led the boost in the sector's performance. Here's how

With the results for the third quarter of 2007-08 flowing in, technology is one sector that everyone is closely watching. Despite growing wage costs, rupee appreciation and possible slowdown in the U.S. economy, the sector seems to be resilient enough to post good numbers. The top five boast of new clients, improvement in price realisation and efficient management of costs.

Net profit rose 6.7 per cent to Rs 1,331 crore compared to fiscal second quarter ended September 30, 2007. The operating profit margin rose to 24.2 per cent, a 33 basis-point increase sequentially. This was achieved through a mix of productivity, pricing improvements and financial management. The figures were under US accounting norms, which equity analysts track in TCS' case. Total revenues grew 5 per cent quarter-on-quarter to Rs 5,924 crore. The share of North America, in total revenues, fell. The company is globally pursuing 25 deals of $50 million plus each. TCS expects the deal flow to be healthy, pricing for its services to have an upward bias. The compnay however retrenched a large number of employees recently.

The IT bellwether reported a standalone net profit of Rs 1,186 crore for the quarter ended December 31, 2007, up 10.42 per cent from Rs 1,074 crore in the quarter ended September 30, 2007. Net sales for the October-December quarter stood at Rs 3,999 crore against Rs 3,862 crore for the quarter ended September, a quarter on quarter rise of 3.54 per cent. On a consolidated basis, net profit for the quarter ended December is Rs 1,231 crore against Rs 1,100 crore for the September quarter. This represents a growth of 11.9 per cent sequentially. Between April to December, Infosys crossed $3 billion in revenues.

Wipro posted a consolidated net profit of Rs 854 crore for the quarter ended December 2007 as against Rs 814 crore in the previous quarter. Consolidated net sales increased to Rs 5,339.60 crore from Rs 4,784.70 crore (quarter on quarter). Global IT revenue stood at $910.1 million. Net profit went up Rs 826 crore from Rs 812.2 crore and revenues at Rs 5,236 crore versus Rs 4,728.1 crore (US GAAP).The BPO services revenue stood at Rs 305 crore and BPO Services' operating margin declined to 22 per cent versus 23 per cent (YoY). Global IT margins were down by 100 bps on account of the buyout of Infocrossing. The company bagged a $100 million deal from Saudi Arabian Airlines.

Satyam Computers
The company registered a growth of 32.17 per cent in services revenue and 28.59 per cent in profit for the third quarter ended December 31, 2007, over the corresponding quarter last year. Sequentially, revenue and profit increased by 8.29 per cent and 6 per cent respectively. The company recorded total revenues of Rs 2,195 crore (Rs 1661.12 crore) with a profit of Rs 433.25 crore (Rs 337.23 crore). During the quarter, the company added 32 clients, including eight Fortune 500 companies, taking its 'Fortune portfolio' to 181. The company also acquired the Bridge Strategy Group for $35 million.

HCL Technologies
HCL Technologies posted a 16.4 percent rise in consolidated quarterly profit as it won more outsourcing deals in Europe and Asia-Pacific. The company has not seen signs of a business slowdown due to economic weakness in the U.S. The company's revenue grew 24 percent to Rs 1,817 crore. According to the company, the U.S. contributed 55 per cent of its revenue in the December quarter, down from 57.3 percent a year ago. The company sees no signs of cuts in technology budgets of its customers, the most prominent being British telecom, Cisco Systems and Deutsche Bank. The company added 29 clients during the quarter, including Merck & Co.