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Shares of Infosys tumbled over 10 per cent after the company today lowered its revenue guidance in dollar terms for 2012-13, dragging down the BSE benchmark Sensex.
The IT bellwether scrip opened the day on a weak note following the guidance at its quarterly results announcement this morning and lost 10.14 per cent to touch a low of Rs 2,216.05 on the BSE. Later, it recovered some ground but was still down nearly 8.7 per cent.
Similarly, on the NSE, the stock tanked 10.19 per cent to a low of Rs 2,219.
Other stocks followed suit, with the BSE 30-scrip Sensex tanking 233 points. It recovered a little, but was still trading 181.19 points down at 173,07.95 at 10.34 a.m.
Market experts blamed the weak revenue guidance, in dollar terms, by the company as the reason behind the steep fall in the stock.
“Infosys reported below estimate results in the first quarter. The company disappointed with the dollar revenue guidance for 2012-13. For Infosys, the dollar revenue guidance was weak, so investors adopted profit-booking,” Ashika Stock Broking Research Head Equities, Paras Bothra, said.
Revenue forecast
Though the company exceeded its revenues forecast in rupee terms, it failed to meet dollar revenue guidance of $1,771 million to $1,789 million for the quarter.
In dollar terms, Infosys slashed its forecast of revenue to be at least $7.34 billion (a growth of 5 per cent y-o-y) against earlier guidance of $7.55 billion-$7.69 billion (a growth of 8-10 per cent y-o-y). This is much lower than Nasscom’s growth estimate of 11-14 per cent for the industry in FY 2013.
Q1 results
Infosys has reported a 32.9 per cent rise in net profit to Rs 2,289 crore for the first quarter ended June 30, 2012, compared to the same quarter last year. Revenues went up 28.5 per cent to Rs 9,616 crore.
“Our focus on Infosys 3.0 and building tomorrow’s enterprise coupled with disciplined execution will help us deliver high-quality growth despite challenges seen in the global economic situation resulting in slower IT spends by large corporations,” Mr S.D. Shibulal, CEO and Managing Director of the company, said in a press statement.
For the year ending March 31, 2013, Infosys expects revenues to go up 19.7 per cent to Rs 40,364 crore.
According to the statement, cash and cash equivalents, including investments in available-for-sale financial assets, certificates of deposits and government bonds was Rs 20,596 crore compared with Rs 16,969 crore last year.
“Global currency volatility continues to be a big challenge for the industry, and we are making the right investments balancing the short-term needs with long-term opportunities,” Mr V. Balakrishnan, Member of the Board and Chief Financial Officer, said in the statement.
Clients, employees
The company added about 51 clients during the quarter and added about 9,236 employees (net addition of 1,157) to take employee count to 1,51,151 employees, according to the statement.
READ ALSO: >Infosys and the ‘new normal'
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