Technology
India
Don’t miss the forest for the trees. The sharp qoq ‘realization’ drop at Infosys was
indeed an important trigger for our Tier-I downgrade last week; however, it was not the
only one. Sharp deterioration in yoy growth trajectory across the sector, failure of Re
depreciation benefits to show up in margins for Tier-Is, and several anecdotes we have
heard from our channel checks on pricing pressure on large deals all contributed to our
increased caution. Over-analyzing Infosys’ realization drop is fraught with the risk of
missing the forest for the trees. We would prefer erring on the side of caution. Material
pick-up in deal-signing momentum is the key risk to our call.
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link: http://www.kotaksecurities.com/pdf/indiadaily/indiadaily18072012zl.pdf
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