India software stocks hit the bargain bin


Shares in India's once high-flying software firms, including Infosys, have been hit hard in the aftermath of last week's attacks

By Staff and reports

BOMBAY, India (CNN) -- Since last week's terror attacks in the U.S., shares in India's leading listed software exporters -- Infosys, Wipro, and Satyam Computer Services -- have dropped 30 to 45 percent.

In contrast, Bombay's benchmark 30-share index has lost about 14 percent in the same period.

The outlook for Indian software services companies, which rely on the U.S. for about 60 percent of their revenues, has dimmed but their battered shares may offer rich pickings for long-term investors.

Infosys fell 7.33 percent in early trade on Friday. Wipro, India's third-largest software exporter after Infosys, plummeted 12.5 percent.

"It's a bit unfair and unreasonable to believe that everything that happens overseas is going to impact India negatively while the rest of the world is reacting in a bit less panicky manner," Singapore-based Samir Arora, head of Asian Emerging Markets at Alliance Capital, told Reuters.

Before the attacks, India's software sector, which serves about 200 of the Fortune 500 giants, was forecast to grow its exports by 40 percent to $8.3 billion in the year to March 2002.

"The immediate reaction is that there is a short-term glitch for the industry but we are not too pessimistic," said Kiran Karnik, president of India's National Association of Software and Service Companies (NASSCOM).

NASSCOM chairman Phiroz Vandrevala told reporters earlier this week that it was likely multinational companies that lost huge amounts of resources in the attack would turn to the Indian IT industry to rebuild.

"If someone today needs very highly skilled resources in large numbers -- 100 or above -- we don't believe any other industry in the world has the bandwidth to provide that," he said.

Reuters contributed to this report.