After slashing its revenue forecast earlier this fiscal, Infosys raised its rupee revenue forecast to be at least Rs40,746 crore (from Rs39,582 crore earlier) and dollar revenue to be $7.45 billion (from $7.34 billion)
IT services major Infosys today reported a marginal drop of 0.12% in net profit to Rs2,369 crore for the third quarter ended 31 December 2012, reports PTI.
However, the revenues (including that of acquired Swiss firm Lodestone) for the reported quarter were up 12.1% to Rs10,424 crore from Rs9,298 crore in the year-ago period, Infosys said in a BSE filing.
“We have done well in this quarter despite an uncertain environment. We continue to gain confidence from a strong pipeline of large deals,” Infosys CEO and managing director SD Shibulal said.
“However, the broader economic environment remains difficult. Even so, we remain cautiously optimistic about the January-March quarter,” he added.
The company had posted a net profit of Rs2,372 crore for the October-December quarter of the previous fiscal (2011-12).
After slashing its revenue forecast earlier this fiscal, Infosys raised its rupee revenue forecast to be at least Rs40,746 crore (from Rs39,582 crore earlier) and dollar revenue to be $7.45 billion (from $7.34 billion).
Reacting to the results, shares of Infosys soared 11.19% to Rs2,580 in early trade on the BSE.
In dollar terms, profit dipped by 5.2% to $434 million in the reported quarter, but revenues were up by 5.8% to $1,911 million in the quarter under review.
During the quarter, Infosys added 7,499 (gross) and 977 (net) employees taking the total headcount to 1,55,629.
Moneylife has filed a complaint with Advertising Standards Council of India (ASCI) against Life Slimming & Cosmetic Clinic (Life Slimming), as it has been using our logo to promote itself, claiming we’ve endorsed their non-surgical liposuction services. This is untrue. Other media houses and large companies have also been named in the advertisement, presumably under the same circumstances.
Hyderabad-based Life Slimming is misleading people by wrongly using the names of several media houses, including Moneylife. The clinic, set up by Life Hospitals, published two full-page ads in The Hindu on 21 December 2012, claiming its services have been “appreciated by press, portals, TC and magazines India wide and worldwide”. A Moneylife reader alerted us to this blatant lie.
Moneylife has never published anything about Life Slimming and its dubious non-surgical liposuction business. However, the clinic has used the Moneylife logo in the ad. While we are flattered that we are in the august company of The Hindu, we have filed a complaint with ASCI about the use of Moneylife logo as a false endorsement. The clinic or its owners neither contacted Moneylife nor have they taken any permission for using our logo for the endorsement.
Life Slimming also uses the names of several well-known companies for its endorsement. It says employees of several large companies like Infosys, Reliance, TCS, Andhra Bank, BHEL, ONGC, SBI, Honda and Mahindra have used its facilities. This may be true, but it is not clear if the bills were paid by the companies or by the employees themselves. This makes all the difference. We doubt any of these companies would pay for cosmetic treatment of their employees. But the clinic has still used the names of corporate houses as endorsements in the ad.
The ad not only uses media names for misleading the readers but also makes false claims. It says, “In just one sitting, lose 20-50% of your body fat”. However, according to Wikipedia, with a single treatment, subjects had a 20% reduction after two months, and 25% reduction at six months, in the fat layer, as assessed by ultrasound. The lipolytic effect of treatment takes place within about two to four months. It is primarily applicable to limited fat bulges.
Life Hospital, which runs the clinic, is managed by one Mrs Pratibha, who is a clinical nutritionist, and Dr Pranaya Sheela, a gynaecologist. One Mr Krishna is the co-founder of the hospital. It also has celebrities like actresses Jaya Prada and Prachi Das endorsing its products.
Non-surgical liposuction is spreading rapidly across the country. It is an alternative to surgical liposuction. The attempt is to melt and liquefy a person's fat cells using non-invasive methods such as ultrasonics, lasers and injections of chemical agents.
Life Slimming uses a trademarked technology Cryolipolysis or CoolSculpting that refers to a medical device used to destroy fat cells. The trademark is owned by Zeltiq Aesthetics Inc. Dr Dieter Manstein and Dr R Rox Anderson at The Wellman Center (Massachusetts General Hospital) developed the concept, explored it in a number of experiments on pigs, and reported their data in 2008. While the process is not fully understood, it appears that fatty tissue that is cooled below body temperature undergoes localized cell death followed by a local inflammatory response that, over the course of several months, results in a reduction of the fatty tissue layer.
Credit Suisse says that the government needs to persuade RBI governor D Subbarao to boost growth and lower debt servicing costs by reducing interest rates. That’s classic pitch by a brokerage that wants a bull run on the back of cheaper money.
Credit Suisse, an international brokerage has said in its recent report on the Indian economy that while the budget will be influential, finance minister P Chidambaram should work hard to both help the rate cutting cause and avoid a sovereign debt downgrade in 2013.
Economists in India feel that wholesale price inflation remained stubbornly high, despite the weakness of activity and commodity price inflation, throughout 2012. Credit Suisse argues that it is easy to give up hope of seeing a material decline in price pressures even in 2013. There is no statistically robust evidence of a structural increase in inflation and the modelling work (by Credit Suisse analysts) suggests that core and headline WPI inflation will drop below 4% and 6% respectively by mid-2013. If this is right then the controversial view of another 125 basis points (bps) of repo rate reductions seems perfectly plausible, according to Credit Suisse analysts. After all, brokerages love nothing more than low interest rates which create a nice bull market. Analysts have shifted the timing of the final move to July from March, still expecting a 50 bps cut on 29th January.
On the forex front, Credit Suisse’s quantitative analysis suggests that the current account deficit will still shrink in 2013. Stronger growth bodes well for a lower fiscal deficit, while the government could surprise many with a tighter-than-expected February budget. Although the brokerage expects global import demand to strengthen in 2013 to the benefit of Indian exports, industrial production in India is also set to pick up, boosting imports.
Credit Suisse is looking forward to a further rally in local currency sovereign bonds, with the 10-year yield likely to fall at least as low as 7.5% by mid-year, also helped by the diminishing prospect of a near-term ratings downgrade. Although it finds it hard to be structurally positive about the currency, it anticipates a short-lived rally, most likely in the March quarter of 2013.
In its projections for the year 2013, Credit Suisse observes, “barring significant upside food and/or fuel price shocks we expect headline WPI inflation to surprise the current market consensus of 7.6% in 2012/13 and 6.5% in 2013/14 on the downside. We are looking for figures of 7.4% and 6% respectively (changed from 7.2% and 6.2% previously).”
Credit Suisse in its projections also points out “In 2012/13 as a whole we now expect a trade deficit of $195 billion (10.6% of GDP), shrinking to $175 billion in 2013/14 (8.3% of GDP). These in turn are likely to be associated with current account deficits of around $80 billion (4.4% of GDP) in the current financial year and $65 billion (3.0% of GDP) in 2013/14. While the former is higher than the last forecast of 4% and above consensus, the latter is quite a bit lower than the 3.5% figure, previously expected and below consensus.”
On GDP growth, the analysts from Credit Suisse say, “We have made a small further downward adjustment to our 2012/13 GDP growth forecast to 5.7% from 5.9%, while opting to leave our 2013/14 forecast at 6.9% (the consensus is at 5.5% and 6.5% respectively). For the record, we are expecting growth to average an above-trend 7.5% in 2014/15, assuming the interest rate views, described below, are correct.”
On the bond market, Credit Suisse is optimistic despite threats from rating agencies like Fitch and predicts, “On the basis of a 125 bps of repo rate reductions our bond strategist is looking for the 10-year yield to fall at least as low as 7.5% by the middle of the calendar year.”
On rupee predictions, Credit Suisse is “looking for the rupee to be Rs53.50 against the US dollar in March, before dropping back to Rs56.5 by the end of 2013.”