After difficult year, one ahead looks challenging: Infosys
Infosys has used the quarterly guidance to manage expectations from investors.
Infosys, the second largest software services exporter, share price took a 10 per cent knock soon after the company’s management predicted a tough year ahead.
“The year ahead looks challenging for the IT services industry, with slow recovery in the global markets,” said S. D. Shibulal, CEO and Managing Director.
The company has given a revenue growth guidance for the full year at 8-10 per cent that is even below IT lobby Nasscom's forecast of 11-14%. This disappointed the market and the share price nosedived.
This was after the company reported a decline in the quarter on quarter revenue and profit (that is a fall in revenue and profit growth over December 2011). “We had a very difficult quarter with revenues declining sequentially,” said V Balakrishnan, Member of the Board and Chief Financial Officer.
“The global currency market volatility continues to be a challenge for the industry,” Balakrishnan added.
As on March 31, 2012,cash and cash equivalents, including investments in available-for-sale financial assets and certificates of deposits was Rs 20,968 crore (Rs 16,810 crore as on March 31, 2011).
The company has decided to pay a dividend of Rs 22 per share interim dividend and Rs 10 per share special dividend. This should calm markets after they expressed disappointment at a revenue and profit growth guidance that was well below expectation.
The company management says that it is investing for future growth.
“We are executing on our Infosys 3.0 strategy which is meant to deliver high quality growth in the medium to long term. We are making investments and have put in place a structure to deliver on this strategy.”
“Our focus on high quality growth coupled with strong financial discipline helped us to deliver on EPS guidance in US dollar terms,” Balakrishnan added.
