Infosys Q1: Results going from bad to worse, say brokers

New Delhi: IT major Infosys announced its first quarter results for FY 13 on Thursday. However, markets were far from happy with the results, which saw a net profit of Rs 2,290 crore in the June quarter against the street expectation of Rs 2,483 crore. Revenue, meanwhile, stood at Rs 9,616 crore against market expectations of Rs 9,715.2 crore. Infosys had reported sales of Rs 8,852 crore and Rs 2,316 crore in net profit in the January to March quarter. (Read More)

 

Moreover, it lowered its dollar revenue growth forecast for 2012-13 to 5 per cent, much lower than 8-10 per cent it had predicted at the end of the March quarter. The sharp revision in revenue growth forecast disappointed investors.

 

Here is what brokerage firms had to say about the results.

 

Kotak:

• Results getting from bad to worse
• Pricing versus volumes dynamics at play once again

 

RBS:

• INFY huge negative surprise
• Stops giving guidance for next quarter
• Have changed his full year guidance from a RANGE to ATLEAST so one needs to compare the same with the lower end given earlier
• Reduces FY13 guidance to 5 per cent from 8-10 per cent earlier - we were expecting it as 6-8 per cent
• Misses Q1FY13 numbers
• Realization drops by ~3 per cent QoQ is a negative surprise and hence EBITDA lower than estimates.
• Nothing on better utilization of cash yet
• Surely a candidate for earnings & valuation downgrade

 

Goldman Sachs:

• Infosys numbers out and seem disappointing on both actual numbers and guidance.

Morgan Stanley:

 

• Infosys not given a Q2 guidance 1st time
• Language for the FY guidance has changed materially

 

Citi:

 

• Infosys numbers very disappointing
• No buy back announcement and guidance is fairly bad
• Decline in revenue is because of cancellation of order From Europe
• EBIDTA margins come off because of lower pricing
• Hiring guidance unchanged at 35,000

 

Motilal Oswal:

 

• Q1 results disappoint
• Full year US dollar revenue guidance likely lower than what market expected, in line with our view
• Looks like quarterly guidance has been stopped
• Q1 USD revenue growth $1,752m, lower by 1 per cent QoQ, but up 4.8 per cent YoY,
• Full year USD revenue guidance is in line with our estimates, but lower than Street. We have a 5.5 per cent YoY revenue growth estimate. Street was expecting a 1-2 per cent cut mainly due to cross currency impact (Appreciation of US dollar against Pound, Euro and Australian dollar)
• Full year EPS at Rs 166.46, revised up by only 4 per cent from Rs 160 earlier, but up 14 per cent on YoY. This is lower than street expectations of approximately Rs170

 

Nomura:

 

• Cut in revenue guidance higher than expected
• Company has missed their constant Currency revenue guidance

 

IDFC:

 

• 1^st impression of dollar revenue quite weak
• Margins of 28 per cent is 300 bps or3 per cent below estimates
• Expect huge pressure on the stock