Views On Infosys - Angel Broking

Ms. Ankita Somani (Research Analyst-IT, Angel Broking) on Infosys 1QFY2013 Results:

"Infosys reported yet another disappointing quarterly result. The dollar revenue declined 1.1% qoq to US$1,752mn as against expectations of it remaining flat. In constant currency terms also, the company has not been able to meet its dollar revenue guidance, the dollar revenues are down 0.4% qoq as against guidance of 0-1% qoq growth. Also, despite having benefits from ~8% INR depreciation and no wage hikes, the EBIT margin of the company declined by 190bp qoq to 28%.

Revenues from BFSI industry and Europe geography declined by 1.0% and 8.1% sequentially. On the positive side, volumes grew by ~2.5% qoq. The company added 51 new clients during the quarter.

Infosys scaled down its FY2013 yearly guidance and expects revenues to be atleast US$7.343bn, growth of 5.0% yoy as against expectations of 6-8%. We believe this clearly indicates challenging visibility in the business volumes and management's future expectation. Overall the results were gloomy with guidance numbers indicating that management is seeing challenges in terms of IT spends from big accounts. We will further downwardly revise our estimates for FY2013 being cognizant of the effect of disappointing guidance and uncertain macros. The stock has corrected significantly in the early trade today, so keeping that in notice, we maintain Accumulate rating on the stock."

Source : Equity Bulls

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