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HindustanTimes Tue,30 Sep 2014

Infosys outlook disappoints, shares hit 3-month low

PTI  Bangalore, April 12, 2013
First Published: 09:44 IST(12/4/2013) | Last Updated: 17:32 IST(12/4/2013)

IT major Infosys on Friday reported a 3.3% increase in its consolidated net profit to Rs. 2,394 crore for the fourth quarter ended March 31, 2013.

The revenues for the reported quarter were up 18.09% to Rs. 10,454 crore from Rs. 8,852 crore in the year-ago period, Infosys said in a BSE filing.

"Global economic uncertainties remain challenging for the IT industry," Infosys CEO and managing director SD Shibulal said, adding "We are making all the investments necessary to differentiate ourselves in the market place while positioning ourselves as a partner of choice for our clients."

The company said it expects revenue to grow by 6-10% in the current fiscal, which is lower than Nasscom's estimate.

In February this year, software industry body Nasscom said information technology and IT-enabled services sectors are expected to grow 12-14% in 2013-14 fiscal.

Reacting to the results, shares of Infosys plunged 18.47% to Rs. 2,379 apiece in early trade on the BSE.

The company had posted a net profit of Rs. 2,316 crore for the January-March quarter of the previous fiscal (2011-12).

The Bangalore-based firm's consolidated net profit for the 2012-13 fiscal rose by 13.3 to Rs. 9,421 crore against Rs. 8,316 crore in the previous financial year.

Its revenues were up by 19.6% to Rs. 40,352 crore in the last fiscal from Rs. 33,734 crore in 2011-12 fiscal.

"The global currency market continues to be volatile reflecting the uncertain economic environment. Our hedging strategy helps us to minimise the volatility impact. We have a healthy balance sheet with our cash and cash equivalents at USD 4.4 billion," Infosys chief financial officer Rajiv Bansal said.

In dollar terms, profits dipped by 4.1% to USD 444 million in the January-March quarter, but revenues were up by 9% to USD 1.93 billion in the quarter under review.

During the quarter, Infosys added 8,990 (gross) and 1,059 (net) employees taking the total headcount to 1,56,688.


Infy slumps 20% on weak revenue outlook

Shares of Infosys on Friday fell sharply by nearly 20%, wiping off Rs. 30,943 crore from its market value, as investor sentiment turned bearish on lower-than-expected revenue growth for the current fiscal.

After making a weak opening from the previous close, shares of the company further tanked 19.8% to Rs. 2,340 on the BSE.

Similar was the trend at the NSE, where the stock crashed by 19.86% to Rs. 2,337.35.

Led by the sharp decline in the share price, the market value of the company tumbled by Rs. 30,943 crore to Rs. 1,36,610 crore.

"Weak revenue guidance and below-expectation numbers dragged down the company's shares. Street had estimated that Infosys would set a target for revenue growth of as much as 12 per cent," said Ashika Stock Brokers, Head Research, Paras Bothra.

The company had posted a net profit of Rs. 2,316 crore for the January-March quarter of the previous fiscal (2011-12).

The company said it expects revenue to grow by 6-10% in the current fiscal, which is lower than Nasscom's estimate.

In February this year, software industry body Nasscom said information technology and IT-enabled services sectors are expected to grow 12-14% in 2013-14 fiscal.

The revenues for the reported quarter were up 18.09% to Rs. 10,454 crore from Rs. 8,852 crore in the year-ago period, Infosys said in a filing to the BSE.

Weakness was also seen in other IT stocks where TCS was trading lower by 2.81%, Wipro (5.26%) and HCL Tech (2.63%).

Tracking weakness in these blue-chip scrips, the BSE IT index plunged 9.43 per cent to 6,153.38 and was the biggest loser among the 13 sectoral indices.

Fall in Infosys' stock which has the second highest weight on the Sensex was instrumental in sending the benchmark index down by 224.41 points to 18,317.79 in the first half of trade.


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