Infosys Q1 FY2013 Result Fails to Meet Expectations

Anup Varier July 12, 2012
Infosys Q1 FY2013 Result Fails to Meet Expectations
A downwardly revised overall growth projection for the year and less than expected revenue growth has disappointed analysts.

Infosys has announced its consolidated results, under International Financial Reporting Standards (IFRS), for the first quarter ended June 30, 2012, posting revenue of $1,752 million.

Although representing a year-on-year(YoY) growth of 4.8 percent, this quarterly result has failed to meet industry analysts' expectations.

"Infosys reported yet another disappointing quarterly result. The dollar revenue declined 1.1 percent quarter-on-quarter(qoq) to $1,752mn as against expectations of it remaining flat," said Ankita Somani, Research Analyst-IT, Angel Broking.

Somani also pointed out that despite reaping the benefits from an approximate 8 percent INR depreciation and not having wage hikes, the EBIT(Earnings Before Interests and Taxes) margin of the company declined by 1.9 percent qoq to 28 percent.

Dipen Shah, Head of PCG Research, Kotak Securities attributed these variances to specific issues. "Infosys’ revenue growth for 1QFY13 was lower than estimates largely due to a one-time reversal of $15mn of revenues from one client because of prudence," he said.