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Infosys was down 4% today, after a business news channel (CNBC) reported
that Infosys may not meet the upper end of its 3QFY12 USD revenue
growth guidance. We checked with Infosys' CFO, Mr. V.Balakrishnan, about
the veracity of these comments. Below mentioned are his comments to our
questions:
Q 1: Would it be fair to say that you will likely miss the higher end of
your 3QFY12 USD revenue guidance of 3.2‐5.4%qoq?
Infosys' reply ‐ Looking at the global markets with increased uncertainty,
the clients cautiousness have only increased. We have given a broader
range of guidance to factor in such uncertainty. Looking at the new normal
world today with heightened uncertainty, we will be somewhere in the
range of what we guided for.
Q 2 : If you think that for 3Q, the growth will likely be close to the lower
end of the range of 3.2‐5.4% qoq USD revenue growth, what has
changed materially in the business environment since the 2Q results ?
Infosys' reply ‐ The global markets economic situation has only deteriorated
from what we saw in the beginning of the quarter. The increasing
economic uncertainty is making customers more cautious on their spending.
Q 3: Are you still comfortable with the full year USD revenue growth
guidance of 17‐19% yoy ?
Infosys' reply ‐ As I said earlier, the whole idea of giving a broader range
is to factor in this uncertainty. We will be somewhere in the range of what
we guided for.
No downward revision to earnings forecast
Our expectation of Infosys' FY12 USD revenue growth of 18.9%yoy (vs
guidance of 17-19%) is at the higher end of the guided range, and we have
an 2HFY12 growth expectation of 5.2%CQGR. We believe that even if one
assumes that the company will report a 17%yoy USD revenue growth for
FY12, the recent rupee weakness provides some cushion .Thus assuming
an average INR/USD realisation of INR49 (vs our current assumption of
INR46.9), and USD revenue growth of 17.2%yoy, our FY12E EPS for Infosys
moves down to INR138 (0.6% lower than current estimate of INR138.8).
Besides, for FY13 we expect the company to deliver a modest 12.9% yoy
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Infosys was down 4% today, after a business news channel (CNBC) reported
that Infosys may not meet the upper end of its 3QFY12 USD revenue
growth guidance. We checked with Infosys' CFO, Mr. V.Balakrishnan, about
the veracity of these comments. Below mentioned are his comments to our
questions:
Q 1: Would it be fair to say that you will likely miss the higher end of
your 3QFY12 USD revenue guidance of 3.2‐5.4%qoq?
Infosys' reply ‐ Looking at the global markets with increased uncertainty,
the clients cautiousness have only increased. We have given a broader
range of guidance to factor in such uncertainty. Looking at the new normal
world today with heightened uncertainty, we will be somewhere in the
range of what we guided for.
Q 2 : If you think that for 3Q, the growth will likely be close to the lower
end of the range of 3.2‐5.4% qoq USD revenue growth, what has
changed materially in the business environment since the 2Q results ?
Infosys' reply ‐ The global markets economic situation has only deteriorated
from what we saw in the beginning of the quarter. The increasing
economic uncertainty is making customers more cautious on their spending.
Q 3: Are you still comfortable with the full year USD revenue growth
guidance of 17‐19% yoy ?
Infosys' reply ‐ As I said earlier, the whole idea of giving a broader range
is to factor in this uncertainty. We will be somewhere in the range of what
we guided for.
No downward revision to earnings forecast
Our expectation of Infosys' FY12 USD revenue growth of 18.9%yoy (vs
guidance of 17-19%) is at the higher end of the guided range, and we have
an 2HFY12 growth expectation of 5.2%CQGR. We believe that even if one
assumes that the company will report a 17%yoy USD revenue growth for
FY12, the recent rupee weakness provides some cushion .Thus assuming
an average INR/USD realisation of INR49 (vs our current assumption of
INR46.9), and USD revenue growth of 17.2%yoy, our FY12E EPS for Infosys
moves down to INR138 (0.6% lower than current estimate of INR138.8).
Besides, for FY13 we expect the company to deliver a modest 12.9% yoy
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