The fourth quarter earnings season got off to a bad start with Infosys, India’s second largest IT services exporter, guiding for muted growth in the 2012-13 fiscal.
Though the company beat analysts' expectations by posting higher than expected profits for the fourth quarter ending March 2012, the Street was disappointed by the fact that Infosys expects FY13 growth to be lower than what was the most conservative estimate.
The company's guidance is taken as a benchmark for the IT industry as a whole. Infosys has guided for 8-10% growth in dollar revenue terms against expectations of 12-15%. The guidance for the full year is even below IT lobby Nasscom's forecast of 11-14%.
The company expects FY13 dollar revenues at $7553-7692 million. The FY13 earnings per share guidance is expected at Rs 158.76-161.4 (at assumed currency rate of INR50.88/USD).
As a result, shares of the company crashed in early trade. At 9.15 am, Infosys stocks traded 10% lower at Rs 2,470 on the BSE, while the Sensex was down 75 points or 0.44% to 17,257.
The announcement of a special dividend of Rs 10 per share failed to lift sentiments. The final dividend for the quarter stood at Rs 22 per share.
The management said it expects macro headwinds going forward. "The year ahead looks challenging for the IT services industry, with slow recovery in the global markets,” said S. D. Shibulal, CEO and Managing Director.
On a sequential (quarter-on-quarter) basis, Infosys clocked consolidated sales of Rs 8,852 crore in Q4 against Rs 9,298 crore in Q3. Fourth quarter profits declined to Rs 2,316 crore against Rs 2,370 crore in Q3. The Street expected sales at Rs 9,111 crore and profits at Rs 2,279 crore.
The company has also failed to meet its revenue guidance for the quarter. Q4 sales were 5.7% lower than the guidance of Rs 9,391-9,412 crore. The earnings per share stood at Rs 40.54 per share against a guidance of Rs 42.12 per share.