EPS numbers driving IT- Software giants

IT- Software Industry is taking steps to decouple revenue and headcount growth with more focus on product design, product development, integration of SAP products and cloud computing. Financial performance of the Indian IT companies deals with ups and downs in FY16. Overall Industry was in a consolidation phase. We have made an attempt to look into IT-Software Industry.

We have analysed 123 companies from IT-Software Industry with respect to their earning per share growth in each quarter of FY16. We have observed that out of 123 companies only 14 companies were able to post steady growth in earning per share of FY16 quarters. Our top five performer in this EPS growth story are Accelya Kale Solutions, Geometric, 8K Miles Software Services, Persistent Systems and Infosys with Q4FY16 vs Q3FY16 EPS growth per cent.

Accelya Kale Solutions, Geometric, 8K Miles Software Services, Persistent Systems and Infosys have shown EPS growth of 4 per cent and above in FY16. Earnings-per-share growth gives a good picture of the rate at which a company has grown its profitability per unit of equity. Stocks with higher earnings-per-share growth rates are generally more desirable than those with slower earnings-per-share growth rates. Accelya Kale Solutions and Geometric have shown highest Earning per share growth of 19 and 18 per cent (Q4FY16 vs Q3FY16). Our top five performers have bestowed investors with handsome returns over a span of last fiscal year. In the list, Geometric and 8K Miles Software Services have given over 95 per cent returns in last one year.

BREXIT has been witnessed by the world on June 24, 2016. S&P BSE IT Index was down by 4 per cent in last one week (20th – 24th June 2016) due to jitters of BREXIT which is low as per our expectation. So, as an investor we can eye on EPS growth as one of the factors to price our stock. 

How will it outperform after Brexit, is a thing to be watched out for???