No EPS guidance by Infy due to currency movement: Pratik Gandhi

Check out the the IT sector outlook and trading strategy for Infosys with Pratik Gandhi, IT analyst at IDBI Capital.

Infosys, country's second-biggest software exporter, posted flat quarter-on-quarter net profit growth at Rs 2,394 crore for the fourth quarter ended March 31, 2013. The revenue outlook by  the IT major was disappointing as the company guided for a growth of 6-10%, much below the Nasscom estimate of 12-14% for the fiscal 2014.  Pratik Gandhi, IT analyst at IDBI Capital shares his views with Aastha Agnihotri on the results and the road ahead for the company. Edited excerpts:

What are your key takeaways from Infosys results?

The results were disappointing and certainly not what we were expecting. The biggest factor was Infosys guidance, we were expecting US$ revenue growth guidance to 12% for FY14 while it turned out to be 6-10%.

Infosys did not give any EPS guidance. What is your take on that?

Yes, this was another factor that we were looking into but they disappointed on that front also. I think it’s the currency volatility due to which they were reluctant to declare guidance on EPS.

What did you make of the operating margins?

The operating margins declined more than we anticipated.

In your view, the Infosys results highlight a very company specific concern or is the entire IT space going through rough-patch?

No, this is a very company specific problem and not a sector oriented. We plan to revise our target for Infosys after analyzing all the numbers.

What are your top picks in the IT space now?

We have HCL Technologies as a top pick followed by Tata Consultancy Services (TCS). Between Infosys and Wipro, we need to take a pick. So, investors can BUY HCL Tech and TCS as a safe bet in the IT space. However, we will wait for Wipro numbers before taking a call between these two. (Infosys and Wipro)



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