Analysts expect Infosys to better guidance

On April 14 last year when Infosys Technologies presented its annual results for 2004-05, the technology giant had expected its revenues to grow at 24.7- 26.6 per cent and earnings at 23-24.9 per cent for 2005-2006.

It had also said revenues for the year ended March 2006 would be in the range of Rs 8,890 crore-Rs 9,029 crore and earnings per share of Rs 84.60-Rs 85.90.

On January 11 this year, while presenting its third-quarter results, Infosys guidance for fiscal 2006 was up substantially.

Income was expected to be in the range of Rs 9,487 crore and Rs 9,496 crore with year on year (y-o-y) growth of 33.10-33.20 per cent and earnings per share was expected to be between Rs 89.90 and Rs 90.30 with y-o-y growth of 30.69-31.27 per cent.

Infosys has always been conservative about future projections. And, it has always outperformed its guidance. During the second quarter ended September 2005, the company had expected income of Rs 2443- 2452 crore with y-o-y growth of 30.25- 30.73 per cent for the quarter ended December 2005.

Its earnings per share was expected to be Rs 23.10; with y-o-y growth of 24.86 per cent. For the quarter ended December 2005, the company's income, however, actually rose 35 per cent to Rs 2,532 crore and earnings per share rose 31 per cent to Rs 23.43.

Infosys had expected an income of Rs 2202- Rs 2,215 crore, with y-o-y growth of 25.88-26.62 per cent for the quarter ending September 30, 2005.

However, it achieved an income of Rs 2,215 crore during the quarter ended September 2005. The company also achieved higher earnings per share of Rs 21.75 compared with expected earnings per share of Rs 19.80- 20.30.

Against the expected income growth of 32-33.2 per cent for the quarter ending June 30, 2005, the company's revenues for that quarter had increased by 34.1 per cent. Its earnings per share for June quarter was higher at Rs 19.33 compared with expected earnings per share of Rs 19.30.

Analyst at Motilal Oswal, Prabhudas Lilladhar and other brokerages and fund houses expect Infosys to beat its guidance for the year ended March 2006.

Merrill Lynch is the most conservative among the analysts and expects Infosys' income to grow at 27 per cent and earnings 25 per cent. Motilal Oswal expects an income growth of 34.5 per cent and earnings growth of 36 per cent for FY06.