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Infosys results and outlook disappoint analysts
Infosys Ltd, India's No. 2 IT services exporter, marginally beat analyst estimates on Friday with a 3.4 percent rise in quarterly profit but its outlook disappointed the market, sending its shares down more than 10 percent in preopen trade.
The company said it expected 2013-14 revenue to grow 6-10 percent, lower than market expectations of 12 percent, and added that global economic uncertainties remain challenging for the industry.
Consolidated net profit for the fiscal fourth quarter ended March 31 was Rs 2,394 crore ($438 million), compared with Rs 2,316 crore in the same period a year earlier.
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Infosys results and outlook disappoint analysts
"The forecast looks quite conservative, which is a concern. The fiscal 2013 was also not very good for Infosys. This looks like company specific problem. Even mid-cap companies are expected to perform better than this," said K.K. Mital, CEO for Portfolio Management Services, Globe Capital.
He added, "The overall recovery in the U.S. and stabilisation in Europe is expected in the second half of this year and that may help Infosys a little."
Suresh Parmar, Associate Vice President and Head of Institutional Equities, KJMC Capital Markets said: "The outlook is slightly negative compared to the expectations. We expect selling pressure in the short-term as the stock ran up sharply in the past couple of sessions. Investors who took positions are likely to cut exposure and wait for further clarity to take a fresh bet on the stock."
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Infosys results and outlook disappoint analysts
"Only the perception has changed, the business remains a bit lumpy for Infosys," said G Chokkalingam, Executive Director and Chief Investment Officer, Centrum Wealth Management.
He added, "The company is growing in single digits in US dollar terms which is not good. The stock should fall at least 5-10 percent on these results."
Nimish Joshi, equity analyst, CLSA, Mumbai said: "The results are very bad; very, very bad. The guidance is especially bad."
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