Infosys
The top loser on the BSE currently is Infosys and almost the entire IT pack, which is down over 9%. The stock has been beaten down to pulp post its Q4 numbers. The market has been disappointed with the Q4FY13 numbers, especially the sequential performance wherein net profit grew by a mere 1% at Rs.2394 crore and revenue was up just 0.3% at Rs.10,455 crore. The company’s EBIDTA infact fell 8% (QoQ) and 7% (YoY) but net profit was boosted thanks to the 34% (QoQ) rise in other income and tax outgo was down 9%. The company has finally started getting flexible on pricing as its OPM for the year has come down to 13.4% in dollar terms.
Further disappointment was due to the muted guidance for FY14 where revenue growth is expected at 6-10% much lower than what most analysts had expected and more importantly, lower than the 10-12% growth estimated by the IT industry body NASSCOM. The company has given no EPS guidance.
During the quarter, the company added 56 clients, hired 1059 new employees, taking the total tally to 1,56,688 employees as at 31st March 2013. The attrition rate has gone up to 16.3% from 15.1% on QoQ and for FY13, it has gone up from 14.7% to 16.3%. Cash at end of FY13 stood at Rs.23,958 crore. The company has set aside Rs 550 crore for investment in product, platforms and solutions
The disappointment is so large as the market had upped its expectations post its Q3 numbers and there had come in a slight feeling of this turning around. But today, apart from the performance, the conservative guidance and the management giving a very cautious outlook for the future, despite the overall industry outlook improving has spooked the markets. So the questions being asked is whether this is an issue with Infosys alone or that of the management.