How have IT stocks performed? Kotak PCG answers

Dipen Shah of Kotak PCG says that Geometric Software's results were pretty much below expectations. He further adds that though on the topline they did show 10% QoQ growth, the margin impact was much higher than what they had anticipated.

As regards to Aztecsoft, he informs that they have been pretty bullish on the stock over the past several quarters. He adds that the company has a good record in terms of adding new clients and in mining deeper into the existing clients.

According to the headline figures of Zensar, Mehta believes that the results were much below market expectations. However, if one looks at their expectations, it is bang on target.

Excerpts from CNBC-TV18's exclusive interview with Dipen Shah:

Q: What did you make of Geometric Software’s performance this quarter?

A: The results were pretty much below expectations. Though on the topline they did show 10% QoQ growth, the margin impact was much higher than what we had anticipated.

If one looks at Geometric Software over the past four-five quarters, there has been uneven kind of a performance from the company and that has continued in the current quarter with the margins falling significantly.

What is more important for Geometric is that - post the acquisition, which they have announced, they will need to integrate it well. Obviously, it’s a big acquisition that the company, on a base of USD 50 million, has acquired, something which could be about USD 30-35 million in revenues.

So we think that the most important aspect in Geometric now is the integration of the company, i.e. Modern Engineering Services business, which they have acquired and the future prospects will largely depend on how successful the integration is.

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