Software services major Infosys underlined concerns about ongoing global economic uncertainty as it gave a less-than-expected revenue outlook while announcing its quarterly results.
The Bangalore-based IT firm projected that its revenue — in dollars — will grow between 8 and 10% in 2012-13, which is much below the average industry projections of around 14%.
Net profit for the January-March quarter stood at Rs 2,316 crore, up 27.4% from same period a year ago. The net profit, however, was down by 2.4% when compared to three months from October till December of the last fiscal.
The revenues of the company stood at R8,852 crore that grew by 22% when compared to same period a year ago, but was down by 5% on a sequential basis.
The company failed to meet its own revenue projections, both for the January-March quarter and for 2011-12.
“The year ahead looks challenging for the IT services industry, with slow recovery in the global markets,” said SD Shibulal, CEO and MD, Infosys.
Infy’s stock closed at R2,403.3, down 12.6%, on muted outlook and less-than-expected profits.
"It has been a pretty difficult quarter for us. There has been a slowdown in decision-making from clients,” said Shibulal. Weak revenue outlook was based on an expected fall in client budgets. “Discretionary spending may drop by 10 to 20% across verticals.”
“The results were below estimates and so is the guidance for fiscal 2012-13. The guidance reflects the challenging macro scenario which Infosys is facing. The recent re-structuring within the company is impacting near-term growth but should help Infosys return to better growth rates in the medium to long term,” said Dipen Shah, head of fundamental research at Kotak Securities
During the quarter, Infosys added 52 clients and a net 4,906 employees.