The Infosys scrip gained more than 4% intra-day after the company reported better-than-expected earnings for the quarter ended March 2014. However, even as analysts found the Infosys revenue growth lagging its peers, the scrip pared the gains and closed just 0.76% higher at R3,260.45
?While the growth guidance could be slightly conservative, it is far lower than the likely growth of many top peers and actually represents a slight deceleration of the overall 10% organic revenue growth in FY14,? Credit Suisse said in a report.
Shares of IT majors TCS and HCL Tech, which are scheduled to announce their quarterly numbers of Wednesday and Thursday, respectively, closed with larger gains.
While TCS moved up 4% or R87.85 to R2251.55, HCL Tech rallied 1.7% or R23.9 to R1,424.45. The Infosys scrip has shed more than 6% year to date even as the Sensex gained 6.2%.
The IT major saw its net profit jump 25% y-o-y to R2,992 crore against a Bloomberg consensus estimate of R2,800 crore. The Bangalore-based company said that it sees revenues for the fiscal growing anywhere between 7% and 9%.
?Looking ahead, we have given a guidance of 7-9%, in dollar terms, for FY15. This translates into 5.6-7.6% in rupee terms based on the USD-INR rate of INR 60,? said B Pravin Rao, president, Infosys, said in the earning
For the year ended March 2014, the company?s revenues crossed the R50,000-crore mark for the first time, posting a y-o-y rise of 24.2%. Operating margins improved for the second consecutive quarter. The Q4 operating margins expanded 50 bps sequentially to 25.5%.
?Quarterly revenues declined 0.4% quarter-on-quarter in the three months ended March largely on the back of slowdown in retail (down 3.5% sequentially) and hi-tech business segments, and also a delay in project ramp-ups,? analyst Bhuvnesh Singh of Barclays said in a post-earnings note. ?We expect investor expectations to remain in check until revenue growth kicks in,? Singh said.
Meanwhile, the company management expects margins of the first quarter of the fiscal 2014-15 to be impacted wage increases.
?The increase in salaries, promotions and investment in new reserves will impact first quarter margins by approximately 250 to 300 basis points. We remain focus on accelerating our growth next year. We will continue to make all possible investment, which are required to achieve them, considering that we expect FY15 operating margins to be in line with FY14 operating margins,? added Rao in the earnings call.
