The country's second largest software services' exporter Infosys on Thursday cut its full-year revenue outlook on the back of a weakening global market and the Euro Zone crisis. The IT giant, which kicks off the earnings season for the quarter, saw its stock fall 8.4 per cent to Rs 2,588.60 following the forecast.

The ADR of Infosys on the Nasdaq crashed 9.34 per cent (or $5.3101) at $51.559 at 8.30 p.m. IST. During early trade, the ADR hit a low of $51.01.

“Global economy, driven by slower growth in developed markets coupled with the European crisis, could impact the growth of the IT industry,” Infosys chief executive, Mr S. D. Shibulal, warned while announcing the company's third quarter results.

As per the revised outlook, Infosys revenues are expected to be in the range of $7.029 billion and $7.033 billion, a year on year on growth of 16.4 per cent which is down from 17.1 per cent to 19.1 per cent projected in October.

For the third quarter, Infosys, however, posted better-than-expected results because of the currency drop leading to a 33 per cent rise in net profit at Rs 2,372 crore and on sequential basis, an increase of over 24 per cent.

Revenues were up nearly 31 per cent year-on-year to Rs 9,298 crore (QoQ 15 per cent). Earnings per share were Rs 41.51 for the quarter, a growth of 24.4 per cent on a sequential basis and 33.3 per cent, year-on-year.

Mr Shibulal said large deals are taking time to close and “we are seeing lack of confidence in clients; so we remain cautious.” He expected technology budgets for 2012 to be flat or marginally lower.

He, however, said volumes have grown, financing has been stable and there have been strong client additions. A total of 49 clients were added during the quarter. North America, which contributes over 60 per cent of Infosys revenues, saw less than 1 per cent growth during the quarter but Mr Ashok Vemuri, who heads the US operations, said it was not a cause for worry as it was a “cyclical” issue.

>sushma.un@thehindu.co.in

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