Despite poor $ guidance, Infy can revive itself: experts

Infosys, India’s second-largest software services exporter, reported a 27.4 percent rise in quarterly net profit, meeting forecast, after customers ramped up orders to cut operational costs.

Bangalore-based Infosys said on Friday consolidated net profit for the fiscal fourth quarter ended March 31 rose to Rs 2316 crore from Rs 1,818 crore a year earlier. The stock opened with a fall of 11% or Rs 300 while rival TCS dropped 5%. Wipro and HCL Tech fell 2.5%. Tech Mahindra was down 1.5 PE.

Infosys, which is also listed on the Nasdaq, was expected to post a 27.5 percent rise in profit in the quarter ended March to Rs 2318 crore.

RK. Gupta, managing director, Taurus Asset Management, felt the results were in line with market expectations but said that all eyes are on guidance.

The company’s guidance is taken as a benchmark for the IT industry. The guidance for the full year is even below IT lobby Nasscom’s forecast of 11-14 percent.

“Eight to 10 percent is an interesting guidance figure as normally Infosys is very conservative with their estimates. This figure makes me think that everything is well with the company,” said Gupta.

However, Ambareesh Baliga, COO at Way2Wealth said the dollar guidance of 8 to 10 percent is poor and the stock could fall to Rs 2,200 in a few months.

Speaking to CNBC-TV18, Moshe-Katri of Cowen & Co said Infosys is going through company-specific problems. He said Infosys has a very competitive position in the market, and should find a way to revive itself.

Sudarshan Sukhani, did not find any problem with the company, but warned investors never to go long on stocks on the eve of a big news.

Agencies