Infosys Ltd , the country's second-largest software services exporter, reported a marginal decline of 1.2% in sequential net profit at Rs 2,289 crore and has cut its guidance for the full year. The company said global economic situation resulted in slower IT spending by its large clients.
Here are a few expert opinions on the results.
P. PHANI SEKHAR, FUND MANAGER, ANGEL BROKING, MUMBAI
"That they had visibility issues was known, but considering the rupee had depreciated so much, the earnings guidance they've given is a shocker.
"So we need to understand what they are saying. Are they saying that their visibility situation has worsened, we need to hear what the management will now say.
"With TCS also coming out today, let's see if this is a wider malice affecting the entire industry or a deeper Infosys specific problem."
NEERAJ DEWAN, DIRECTOR, QUANTUM SECURITIES, NEW DELHI
"The dollar guidance is pretty muted and that clearly shows that there is pressure on revenue and margins. If Tata Consultancy comes out with better numbers today as they have been doing for the past few quarters, then Infosys' valuation gap with it will widen.
"Infosys stock won't go up in a hurry. I think it will settle around 2,200 rupees in the near term. People would like to wait to see some signs of performance pick-up before coming back to the stock.
"There is budget constraints at the clients' end and these outsourcing companies are also taking a hit because of Europe."
ANKUR RUDRA, ANALYST AT AMBIT CAPITAL, IN MUMBAI
"We were expecting the guidance to be cut by 200 basis points, but it's much worse than that. Demand outlook for Infosys has worsened considerably. We think this is highly company-specific; expect relatively stronger results from its peers.
"I don't see too much downside from here, since these numbers are factored in, but I don't see any near-term recovery either."
HARIT SHAH, SENIOR RESEARCH ANALYST, NIRMAL BANG INSTITUTIONAL EQUITIES, MUMBAI
"Everything is poor in Infosys results, and this kind of guidance cut will definitely materialise into further derating of the stock."
"One should expect more downgrades on Infosys in coming days on slumping demand. TCS (Tata Consultancy Services
PARAS ADENWALA, MD & PRINCIPAL PORTFOLIO MANAGER, CAPITAL PORTFOLIO ADVISORS, MUMBAI
"Infosys guidance is bad and it will have implications for the sector as well. It clearly reflects slowdown in Europe and in the United States and the company's internal policies.
"My sense is that TCS would be better than Infosys because of a more flexible business model.
"Even if TCS numbers are in line, it will continue to command premium."
SURESH PARMAR, ASSOCIATE VICE PRESIDENT, INSTITUTIONAL EQUITIES, KJMC CAPITAL MARKETS
"The results and forecast are also not appealing. This will have a negative effect on the company. We see significant downside for the stock in the medium term."
MARKET REACTION
Infosys shares slumped fell as much as 10.2 percent after the company said it expected revenue to grow by 5 percent in the fiscal 2013 year, below previous outlook of 8-10 percent.
