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Infosys FY 13 revenue outlook under threat: UBS
Infosys' dollar revenue growth outlook of 5 per cent for the year ending March 2013 could be under threat, Chief Executive S D Shibulal was attributed as saying by UBS in an investor meet.
Customer deferrals, ramp-downs in a few large projects, delays in large deal closures and longer-than-expected client shutdowns due to Hurricane Sandy, especially in the manufacturing sector, may cause threat to outlook, says a UBS note.
UBS says it was not surprised by potential outlook cut, but fears its own revenue forecast for company at 3.8 per cent may be hurt as it had not factored impact of Hurricane Sandy.
"Our conversation with Infosys reinforces our concerns on near-term pressures on guidance. This is likely to impact stock price over the near term, but we see limited downside from current levels given the low expectations and cheaper valuations," says the note.
Nomura says possibility of an organic revenue growth outlook cut in the third quarter of current fiscal year remains high. It prefers companies with current business momentum like HCL Technologies, Cognizant Technology Solutions and Tata Consultancy Services.
UBS, Nomura both retain "Neutral" rating on Infosys stock. Shares of the company fall 0.6 per cent.
An Infosys spokeswoman does not have an immediate comment.
The NSE's IT index has fallen 2.73 per cent in last two days after a Cognizant Technology Solutions Corp filing with the SEC raised concerns about its 2013 revenue outlook.
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