Infosys Technologies lost ground for the second straight session on Wednesday.

The stock of the software bellwether was down 1.3% at Rs 4,168.55 on the BSE by the first couple of hours of trading. Earlier in the session, it hit a low of Rs 4,137. 99,000 shares changed hands on the counter. The stock had shed 3.5% on Tuesday to settle at Rs 4,226.75.

Unit Trust of India is said to have offloaded the stock of late. A few sessions ago, some of the local funds had mopped up the stock.

The Infosys Technologies scrip has been witnessing alternate bouts of buying and selling since the last few sessions, moving in a range of Rs 4,000-Rs 4,400.

The subdued trend on the counter comes amid expectations of a cautious guidance from the Bangalore-based company at the time of announcing its Q4 results on Thursday. “No one is gung-ho about the stock,” said a dealer with a local brokerage. While a dull forecast is a cause for concern, market men said that even if the company comes out with a 20% revenue growth projection for FY 2002-04, the same is already factored in the current share price.

ITL usually announces future guidance along with its results. While a small section of the market feels that the company may not come out with lacklustre forecast, others feel so. The sluggish US economy and the ongoing US-Iraq war are the two main factors behind the pessimism.

In a recent report, domestic brokerage Birla Sun Life Securities said there was high possibility of a cautious muted guidance from Indian IT services companies while announcing their MQ 2003 results. "The key factors dominating a cautious guidance, in our view, will be the continued overhang of the US-Iraq conflict and delay in closure of large sized deals," it said.

For FY 2003-04, another brokerage, HDFC Securities, expects ITL's volume growth to remain strong due to the momentum provided by the strong project starts (1000+) in the first 9 months of FY 2002-03.

According to a capitalmarket.com poll of analysts, the company's net profit will be in the range of Rs 259 crore (Rs 2.59 billion) to Rs 281 crore (Rs 2.81 billion) for MQ 2003 as against a net profit of Rs 256.3 crore (Rs 2.56 billion) in December 2002, a gain of 1% to 9.6%. On quarter-on-quarter basis, the sales growth was forecast in the range of 2.2% to 8.8%. Sales in DQ 2002 were at Rs 958.6 crore (Rs 9.58 billion).

Volume growth and increase in margins are expected to drive ITL's growth in Q4. The company's margins had come under pressure by 1% in Q3 partly because of purchases of additional software.

While outsourcing is seen as a major driver of ITL's future growth, there have been concerns over a host of US States introducing Bills barring governments from outsourcing IT-enabled services work to cost-effective destinations.

BSE code: 500209