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Shares of the software bellwether tumbled by over 7% on the bourses in early trade as the company disappointed investors with its weak dollar-revenue guidance
Mumbai: Flagging off the third quarter (Q3) earnings season, IT major Infosys today posted a 33.25% increase in consolidated net profit to Rs2,372 crore for the three-month period ended 31 December 2011, above market expectations, reports PTI.
The company had registered a net profit of Rs1,780 crore for the December quarter of the previous fiscal (2010-11), Infosys said in a filing to the BSE.
“The Infosys result has shown that the margin has increased. The depreciation of rupee has clearly shown an impact on the Infosys result, which was better than market expectations,” CNI Research CMD Kishore P Ostwal said.
Consolidated revenue of the country’s second-largest software exporter rose by 30.8% to Rs9,298 crore during the period under review from Rs7,106 crore in the year-ago period.
The results were better than the company’s revenue guidance of Rs8,826 crore to Rs9,012 crore for the third quarter, which would have translated into year-on-year growth of 24.2% to 26.8%.
“The global economy, driven by slower growth in developed markets, coupled with the European crisis, could impact the growth of the IT industry,” Infosys CEO and managing director SD Shibulal said.
“Notwithstanding short-term challenges, we are focused on long-term growth opportunities by investing in platforms and solutions, which will accelerate innovation, enhance returns for our clients and deliver higher business value,” he added.
For the ongoing quarter ending 31 March 2012, Infosys expects revenues to be in the range of Rs9,391 crore to Rs9,412 crore, with year-on-year (y-o-y) growth of 29.5% to 29.8%.
For the year ending 31 March 2012, the company expects revenues to be in the range of Rs34,273 crore to Rs34,294 crore, translating into y-o-y growth of 24.6% to 24.7%.
The company said as of 31 December 2011, its cash and cash-equivalents, including investments in available-for-sale financial assets and certificates of deposits, stood at Rs19,752 crore.
“The global currency market continues to be volatile, with the Indian rupee depreciating by 11% during the quarter,” Infosys’ member of the board and chief financial officer V Balakrishnan said.
“Managing extreme currency volatility in an uncertain economic environment is going to be a challenge for the industry. We believe our focus on high-quality growth combined with our flexible financial model will position us better during these challenging times,” Mr Balakrishnan added.
The company had 1,45,088 employees as of 31 December 2011. It added 49 clients during the quarter.
Shares of the software bellwether tumbled by over 7% on the bourses in early trade even after reporting better-than-expected results for the December quarter, dragging down the BSE benchmark Sensex.
The scrip, which carries the maximum weight on the Sensex, opened the day on a poor note and fell further by 7.64% to an early low of Rs2,610 on the BSE.
Similarly, on the NSE, the stock shed 7.66% to a low of Rs2,609.85.
Infosys has 10.30 % weight in the 30-share Sensex pack, followed by RIL, which has 10.06% weight.
Market experts blamed the weak revenue guidance by the company as the reason behind the steep fall in the stock.
“Infosys reported better-than-street-expected numbers in the third quarter, but the company disappointed with its dollar revenue guidance for FY11-12. The market is always forward-looking. For Infosys, the dollar revenue guidance was weak, so investors adopted profit-booking,” Ashika Stock Broking research head-equities Paras Bothra said.
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