A good show by software cos in Q3-06

By agencies   |   Wednesday, 25 January 2006, 08:00 Hrs
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CHENNAI: Frontline software companies logged another quarter of strong growth on the revenue and earnings front for the third quarter of the current financial year.

The performance of Infosys Technologies and Tata Consultancy Services (TCS) were in line with market expectations, Wipro and Satyam Computers exceeded them comfortably.

On financial front, for the second successive quarter, the software majors clocked double digit sequential on quarter-to-quarter (QoQ) growth in revenues. The growth picture on the earnings front, however, was mixed. Wipro Technologiess, the global IT services and products arm of the diversified Wipro surprised the markets with a 12 percent rise in revenues and 13.8 percent jump in net profit.

On the other hand Satyam continued its good performance run, with an operating profit growth of 13.8 percent on a revenue growth of 9.5 percent on a sequential basis. It also proved to be an unusually active quarter on the deal making and acquisition front.

During the quarter, TCS acquired Australia-based FNS to enhance its banking products portfolio and Comicrom in Chile to expand its foothold in the BPO segment. Wipro also snapped up two companies – Austria-based NewLogic and the U.S.-based mPower.

Revenue growth from the top five clients of the software majors had played a major role in during the quarter. The increase in client pipeline in different revenue buckets ranging from $1 million to $10 million continued to be strong.

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