Tech companies

Something good about falling US dollar. IBM posted spectacular result with their revenues up by 24% YoY. The fourth quarter figure was $ 28.9bn. The stock closed 5.39% up and also fired up the US stock markets. The results must have put few doubts t to rest till we have one bad result.

These days the results of technology services companies serve as barometer. The more diversified their services, the more they tell about health of the companies they get their business. All the talks of US economy being in recession and sub-prime crises could be put off by a day.

Later in the day when Indian markets open, the Indian technology stocks, which have been shunned by investors and speculators for most part of the last calendar year might have a good run as well. Indian tech stocks have been written off due to depreciating dollar, recently due to recession in US stock market and sub-prime fears. Though a closer look might take sheen off the result, half of the IBM’s earnings is due to more dollar per foreign currency. Still the fears of global economic recession have been subdued.

I still think there is more than falling dollars story for some of the ‘hyped’ and stock market darling tech companies of India. They had a phenomenal rise all these years coupled with huge margins, not ever seen and still not seen by other Indian businesses. All this masked many of the shortcomings in their businesses. Lack of diversification, hedging of risks in business model and undue gloating in publicity don’t go well in trying times, such as of now. The rocks appeared just when the water level of the river started to decrease. Only hope they will do away with the shortcomings that are more obvious than every before. Hobnobbing with media can’t makeup everything.