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Infosys share price: Stock down more than 9% on Q4 results; below Rs 3000
MUMBAI: Infosys shares closed down 9.59 per cent on BSE at Rs 2988.80. Shares fell after the Indian outsourcing firm reported lower-than-expected fourth quarter net profit, and dragged the broader market down.
Infosys Technologies Ltd , India's No. 2 software services exporter, lagged market expectations despite a 13.7 percent rise in quarterly profit, hurt by higher expenses in a seasonally weak quarter.
Here is what the experts have to say about the prospect of Infosys and other IT stocks after the quarterly results.
Sandip Kumar Agarwal, IT Analyst, Antique Stock Broking
The Street's expectation for EPS guidance for FY12 was around Rs 140 and if you see Infosys never guides very aggressively. Last year also, they guided Rs 110 for FY11 and outperformed it by approximately Rs 9.
We should not see what they have guided Rs 128. We believe that it is a good company and is fundamentally very strong, and they will definitely outperform it. So, there is nothing bad in that.
Secondly, more disappointment has primarily come from the quarter numbers. The Street was expecting very high profit of Rs 1,856 crore, and the actual profit came a little lower than that. Revenue also came a little lower and that is the primary reason of the disappointment. Otherwise, the revenue guidance for FY12 in dollar terms is also 18% to 20% which is very strong and the Street was also expecting 17% to 19%.
I think they have guided good revenues for FY12, and only the EPS guidance is slightly low. This could be partly because they might have taken into account wage inflation and other things, but at the same time we believe consultancy revenue is picking up. You have around $2 billion contract which will come for renewal in this year and most part of it is at a very high. So, definitely Indian top tiers Infosys and TCS will gain from those contracts and based on that margins will improve. So, it is not that disappointing in my view.
When asked about his call on Infosys, Sandip Kumar Agarwal said, "Yes, at Rs 3,000 levels, I would be a buyer."
Ashwani Gujral, Chief Market Strategist, ashwanigujral.com
Infosys could move lower because clearly the results are subdued and you are sitting on a large rally. Global markets are a bit jittery. So, there could be more downside. This may not be the right time to buy.
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