Last quarter, when Infosys released results that did not meet analyst expectations, the stock suffered an almost 10% drop in a single day and continued to drift lower for the next few days. The question on everyone's mind was whether the big Indian IT companies could continue delivering growth rates of over 30%. If not, their current premium valuations could make them risky investments. Soon thereafter Wipro released stellar third quarter results reporting earnings that were up a very respectable 27% and adding 61 new clients.
Infosys released quarterly results on Friday with revenue up 30% for the fourth quarter and 35% for the full fiscal year 2006. Infosys also declared a 1:1 stock split (or bonus as it is referred to in India) and two special dividends. The stock shot up $9.80 or 13.07% on Monday while Wipro ran up 6.86% in empathy. Wipro gained an additional 2.05% in after hours trading. If you are interested and have the time to read the full transcript of the conference call, you can do it here. Wipro plans to release quarterly results on April 19th and if they meet expectations, fears about a drop in the growth rate would be laid to rest.