CapitalMarket.com - Infosys softens as clients delay IT spending
Hot Pursuit Friday, June 08, 2012 12:06 Hrs IST

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Infosys softens as clients delay IT spending

Infosys lost 2.12% to Rs 2,401 at 11:58 IST on BSE after the company's Executive Co-chairman said on Thursday that the company has been witnessing delays by clients in deciding on their information-technology spending.

Meanwhile, the BSE Sensex was down 105.62 points, or 0.63% to 16,543.43

On BSE, 34,805 shares were traded in the counter as against average daily volume of 1.66 lakh shares in the past one quarter.

The stock hit a high of Rs 2,455.45 and a low of Rs 2,393 so far during the day. The stock had hit a 52-week low of Rs 2,169 on 25 August 2011. The stock had hit a record high of Rs 3,020 on 8 July 2011.

The large-cap stock had outperformed the market over the past one month until 7 June 2012, rising 0.92% compared with the Sensex's 1.56% fall. The scrip, however, underperformed the market in past one quarter, sliding 14.82% as against 2.90% fall in the Sensex.

India's second largest IT company by revenues has an equity capital of Rs 287.12 crore. Face value per share is Rs 5.

The Infosys stock rose 1.78% to Rs 2,452.95 on Thursday, 7 June 2012. Infosys' Executive Co-chairman S. Gopalakrishnan told reporters on Thursday that company has been witnessing delays by clients in deciding on their information-technology spending, but the company hasn't seen any contract cancellations. In the medium-to long-term, unless and until there is a certainty in the euro zone, it is not good for business, Gopalakrishnan said. When there is uncertainty, companies pull back on investments, even though they are doing well, he added. Overall, the environment continues to be uncertain, he added.

Infosys' American depository receipt or ADR fell 2.38% to settle at $43.88 on the Nasdaq on Thursday, 7 June 2012.

Infosys had declared a weaker-than-expected revenue growth outlook for the current fiscal year at the time of announcing results on 13 April 2012. Infosys reported a 2.4% fall in consolidated net profit as per IFRS to Rs 2316 crore on 4.8% decline in revenues to Rs 8852 crore in Q4 March 2012 over Q3 December 2011.

On a consolidated basis under IFRS, Infosys expects revenues to be in the range of Rs 9011 crore and Rs 9100 crore in Q1 June 2012, indicating a year on year growth of 20.4% to 21.6%. Earnings per share (EPS) is expected to be Rs 36.89, indicating a year on year growth of 22.4%.

In dollar terms, on a consolidated basis under IFRS, Infosys expects revenues to be in the range of $1,771 million and $1,789 million, a year on year growth of 6.0% to 7.1%. Earnings per American Depositary Share (EPADS) is expected to be $0.73; a year on year growth of 9%.

For the fiscal year ending 31 March 2013, revenues are expected to be in the range of $7,553 million and $7,692 million; a year on year growth of 8.0% to 10.0%. Earnings per American Depositary Share (EPADS) is expected to be in the range of $3.12 to $3.17; a year on year growth of 4.0% to 5.7%. The guidance is based on exchange rates of AUD / USD at 1.04; GBP / USD at 1.60; Euro / USD at 1.33

Infosys is India's second largest IT services exporter after TCS. The company provides business consulting, technology, engineering and outsourcing services to clients in over 30 countries.

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