Infosys Disappoints, Stock Plummets
Sagar Lele / 12 Jul 2012
Infosys announced its quarterly results today after which the stock price of the IT major fell by more than 9 per cent, also dragging the overall market sentiment into the negative zone. The dollar revenue announced by Infosys for Q1FY2012-13 stood at USD 1.752 billion, which is 1.07 per cent lower sequentially. In rupee terms though, the company announced their revenues to be Rs 9,616 crore, in line with our estimate of Rs 9,612.84 crore. This results in a growth of 8.63 per cent which is attributed to a depreciated rupee and no value addition is seen in the company’s revenues.
The net profit too declined sequentially for Infosys, both in dollar and rupee terms, with dollar profit falling as much as 10.15 per cent to USD 416 million for Q1FY2012-13 from USD 463 million. All the segments witnessed sluggish growth with manufacturing enterprises (MFG) and retail, logistics, consumer product group, life sciences and healthcare enterprises (RCL) growing at over 12 per cent each in rupee terms. Energy, utilities and telecommunication services (ECS) performed poorly with rupee revenues going up by only 0.68 per cent.
Infosys also revised their yearly guidance from the earlier estimates announced at the end of Q4FY2011-12. In dollar terms, the firm reduced the guidance for FY2012-13 from the already sub-standard 8-10 per cent (USD 7.553 billion to USD 7.692 billion) to 5 per cent (USD 7.343 billion). The rupee guidance of the company witnessed an upward revision from 13.9-16 per cent to 19.70 per cent, mainly considering a negative outlook for the rupee.
Moreover, the company has not announced the guidance for Q2FY2012-13, with quarterly guidance always being announced over the years. The cumulative effect of these factors has been highly negative on the stock and the TCS results, to be announced later today, will decide the market sentiment over the week.
We are of the view that the short term outlook of the company is not very favourable and that investors should accumulate stocks to benefit in the long run.
Quarterly Results
|
| Q1FY13 | Q4FY12 | ||
|---|---|---|---|---|
|
| USD Billion | Rs Crore | USD Billion | Rs Crore |
| Revenue | 1.752 | 9,616 | 1.771 | 8,852 |
| Profit | 0.416 | 2,289 | 0.463 | 2,316 |
Segment-wise Revenue
|
| Revenue (Rs Crore) | ||
|---|---|---|---|
| Segment | Q1FY13 | Q4FY12 | % Change |
| FSI | 3,302 | 3,037 | 8.73 |
| MFG | 2,120 | 1,883 | 12.59 |
| ECS | 1,915 | 1,902 | 0.68 |
| RCL | 2,279 | 2,030 | 12.27 |
| Total | 9,616 | 8,852 | 8.63 |
Guidance Revision
|
| Guidance (FY2012-13) | |||
|---|---|---|---|---|
| As Announced At The End Of | Q4FY2011-12 | Q1FY2012-13 | ||
|
| USD Billion | Rs Crore | USD Billion | Rs Crore |
| Guidance | 7.553-7.692 | 38,431-39,139 | 7.343 | 40,364 |
| Growth | 8-10% | 13.9-16% | 5% | 19.70% |
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