Follow Us:
Friday, July 20, 2018

Infy misses,Sensex tanks; TCS going strong

Infosys Tech Q1 net up 32.9%; Bleak guidance pulls down stock by 8.15%

Written by ENS Economic Bureau | Bangalore | Published: July 13, 2012 1:02:52 am

Infosys Technologies on Thursday wreaked havoc on the stock markets with the company announcing its failure to meet its dollar revenue guidance while also cutting its dollar forecast for the fiscal 2013,sending its shares crashing by 8.15 per cent on the BSE.

The company posted a 32.9 per cent rise in net profit at Rs 2,289 crore for the June quarter,revenues in dollar terms of $1,752 million (a year-on-year growth of 4.8 per cent) and net income of $416 million for the first quarter. The dollar revenue fell behind the company’s guidance range of $1,771 million to $1,789 million projected at the end of March.

Infosys has projected revenues to be at least Rs 40,364 crore for the current year growing 19.7 per cent over last year,while dollar revenues are projected to be at least $7.343 billion,a growth of 5 per cent over last year. The dollar revenue projection is a cut back from the 8-9 per cent given in April.

In a major shift from the norm and in an indication of the uncertain business environment that it is operating in,Infosys also withheld for the first time a projection of its revenues for the current quarter and for the second successive quarter,slashed its revenue projections for the year.

The company reported Rs 9,616 crore in revenues in rupee terms for the quarter ended June 2012,a year-on-year growth of 28.5 per cent. On a sequential basis,rupee revenues grew 8.6 per cent and net profit declined by 1.2 per cent over the March quarter. The rupee revenues were ahead of guidance.

“We believe the quarterly movement in revenues is going to be volatile. The world is very challenging. There is no uptick in employment or growth in developed markets. In an environment like this,where spending is going to follow the macro economic movement,we believe that giving a quarterly guidance could be challenging. So we have only given a yearly guidance,’’ the company’s CFO and member of the board V Balakrishnan said.

Infosys CEO and MD SD Shibulal said the dip in dollar revenues was on account of two events. “We lost $13 million due to currency,we took a one-time write off of $15 million of accrued revenue as a matter of prudence on a large transformational program that got cancelled this quarter in Europe. So,that is why our revenue ended up at $1,752 million,’’ he said.

The attrition in the company was recorded at 14.9 per cent,up from the 14.7 per cent of the last quarter. The company said that it would continue its freeze on salary hikes and visit the issue mid-year. The company will hire 35,000 people for the year including 13,000 for the BPO business.


* Order cancellations have started (Infy lost a $ 100 mn plus client)

* Billing rates have taken a tumble in the quarter (Pricing saw a steep fall of 3.7% q-o-q)

* Infy reduced total IT services employees by 1,092 in the quarter

IMPACT: Volumes are not expected to recover any time soon

KEY ISSUE: There’s likelihood of a price war in the sector

THE PROBLEM: Energy and Utilities -7.3% q/q in cc (constant currency) terms by vertical and Europe (-8.1% q/q and -7.2% q/q) turned out to be the sore points that dragged down growth


* The lack of near-term visibility has caused the company to not give guidance for the Sep-12 quarter

* Revenue guidance for FY13 has been reduced to 6% y/y in constant currency and 5% in US$ terms (from 8-10% earlier)

For all the latest News Archive News, download Indian Express App