Infosys tanks over 10 pc on weak outlook; drags down Sensex

Infosys tanks over 10 pc on weak outlook; drags down Sensex

Shares of Infosys tumbled over 10 per cent after the company today lowered its revenue guidance in dollar terms for 2012-13, dragging down the BSE benchmark Sensex.

The IT bellwether scrip opened the day on a weak note following the guidance at its quarterly results announcement this morning and lost 10.14 per cent to touch a low of Rs 2,216.05 on the BSE. Later, it recovered some ground but was still down nearly 8.7 per cent.

Similarly, on the NSE, the stock tanked 10.19 per cent to a low of Rs 2,219.
Other stocks followed suit, with the BSE 30-scrip Sensex tanking 233 points. It recovered a little, but was still trading 181.19 points down at 173,07.95 at 1034 hrs.

Market experts blamed the weak revenue guidance, in dollar terms, by the company as the reason behind the steep fall in the stock.

"Infosys reported below estimate results in the first quarter. The company disappointed with the dollar revenue guidance for 2012-13. For Infosys, the dollar revenue guidance was weak, so investors adopted profit- booking," Ashika Stock Broking Research Head Equities Paras Bothra said.

Though the company exceeded its revenues forecast in rupee terms, it failed to meet dollar revenue guidance of USD 1,771 million to USD 1,789 million for the quarter.
In dollar terms, Infosys slashed its forecast of revenue to be at least USD 7.34 billion (a growth of 5 per cent y-o-y) against earlier guidance of USD 7.55 billion-USD 7.69 billion (a growth of 8-10 per cent y-o-y).

This is much lower than Nasscom's growth estimate of 11-14 per cent for the industry in FY 2013.

In rupee terms, Infosys reported 32.92 per cent jump in consolidated net profit at Rs 2,289 crore for the first quarter ended June 30, 2012.

The company had posted a net profit of Rs 1,722 crore for the April-June quarter of the previous fiscal (2011-12), Infosys said in a filing to the BSE.

The company's revenues moved up 28.47 per cent to Rs 9,616 crore in the first quarter, from Rs 7,485 crore in the year-ago period. In dollar terms, the company's revenue stood at USD 1,752 million, as against USD 1,671 million in the same quarter last year, up 4.8 per cent.

Selling pressure was seen across-the-board in the IT index. The country's biggest IT exporter TCS was trading lower by 1.26 per cent, while the third-largest software company Wipro lost 3.39 per cent.

Led by losses in these stocks, the BSE IT index was trading at 5,363.68, down 5.47 per cent and was the top loser among the 13 sectoral indices.

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