In 5 out of 8 quarters, analysts have been horribly wrong about Infosys’ results, leading to a huge gap-down opening including today. What a huge fall for a company that once declared that "under-promise and over-deliver" was its strategy

Infosys shares fell by over 21% from Rs2,917 to Rs2,295 today, the biggest decline in 10 years. Infosys has forecast dollar revenue to grow between 6% and 10% for the fiscal year that began this month which was less than analysts' estimates for revenue growth of as much as 12%. This seemed like a nasty surprise to the market. But was it really a surprise? Let’s see what the analysts have been expecting Infosys to do and what it has actually done over the last eight quarters, including the just-concluded quarter.

Instance2: Q3FY13 – When the third quarter results were out on 11 January 2013 the stock jumped by nearly 17% from Rs2,320 to Rs2,712. Infosys’ net profit at Rs2,369 crore in the December quarter was flat against the September quarter, but much better than the average estimate of analysts. Revenues of Infosys had risen 12% in the quarter to Rs10,424 crore compared to a year earlier. That was better than analyst estimates of Rs9,860 crore. This was a rare instance of Infosys surprising the market positively.

Instance3: Q2FY13 – On 12 October 2012 when the second quarter results of Infosys were announced the stock price fell by 5% from Rs2,531 to Rs2,396. The fall was not much as the results were largely ‘in-line’ with the street estimates, though the IT major lowered its revenue growth guidance.

Instance4: Q1FY13 – Here again, the performance of Infosys was far below street estimates, the stock plummeted 8% from Rs2,466 to Rs2,265. The company cut its sales forecast to 5%, much lower than the 8%-10% it had predicted. The company had forecast FY13 earnings per share (EPS) at Rs166.50, which was lower than estimates. Kotak Institutional Equities summed up the disappointing results announcement of Infosys as "From bad to worse". Analysts on average were expecting Infosys to report a net profit of Rs2,448 crore on revenue of Rs9,665 crore. however, the IT giant could manage a net profit of Rs2,289 crore with revenue of Rs9,616 crore.

Instance5: Q4FY12 – The share price slumped by 13% from Rs2,750 to Rs2,403. Not only did its fourth quarter sales trail estimates, its sales forecast too missed analyst estimates. Its revenue guidance at the time came as a shocker to analysts who then downgraded the stock. Infosys announced a dollar revenue guidance of 8%-10%, which was much lower than industry body Nasscom’s estimate of 11%-14% for the industry.

Instance6: Q3FY12 – Though the 33% rise in profit for the quarter beat analyst estimates, its revenue guidance disappointed. The stock price fell by 8% from Rs2,826 to Rs2,589. The compa ny had forecast dollar revenue growth of 16.4% for the fiscal year to 31^st March, down from 17%-19% projected in October 2011. Based on consensus estimates, the firm was expected to cut its dollar revenue target for the March quarter by 1%-2% compared with what it had estimated three months ago. Instead, it has cut its fourth quarter target by as much as 3%-7%.

Instance7: Q2FY12 – A rare instance, when the shares rose around 7% from Rs2,509 to Rs2,680 after it announced earnings for the second quarter of FY12. The company had cut its fiscal year 2011-12 (FY12) dollar revenue target by only 1%, on account of unfavourable cross currency movements. Analysts were enthused about the fact that the firm had kept its volume growth assumptions intact, despite the increased uncertainty in the global economy.

Instance8: Q1FY12 – Infosys revenues missed estimates and the share price fell by 4% from Rs2,919 to Rs2,794 and continued to head lower, even though net income increased 16% over the quarter which was in line with the median analyst estimate compiled by Bloomberg. This was just the beginning of the company’s woes. Wage inflation pulled down the net profit, on a sequential basis, by 5.3% to Rs1,722 crore while revenues grew 3.2% to Rs7,485 crore.

As all these cases show, analysts have been consistently way off the mark in estimating Infosys's results despite continuous interaction with the management. But this stunning saga not only shows the qualtity of analysts but also shows how things have changed at Infosys. There was a time when Infosys set the standards on corporate reporting in India. It was the first company to start reporting quarterly results much before it became mandatory. Also, for years, Infosys surprised the market with its conservative guidance and superlative actual results. It believed, in the words of founder NR Narayana Murthy, in the principle of under-promise and over-deliver. It is now the possibly the reverse: promise to naive analysts and under-deliver.