Mumbai: Infosys Technologies’ results for the quarter ended September has beat even high market expectations.
After strong results from Accenture Plc, Indian IT outsourcing firms such as Infosys Technologies Ltd were expected to report strong results. Expectations from the market, too, were running high.
Infosys revenues grew by as high as 12.1%, higher than the most bullish estimates. CLSA, which has a buy rating on the firm, had expected revenues to grow by 8-8.5% in dollar terms. Infosys reported a 10.1% growth in revenues in dollar terms. Operating profit growth, too, was strong at 19.5%.
But while the Q2 performance was better than expected, the outlook for the second half of the year isn’t very strong. In fact, the outlook hasn’t really changed since July when the company reported its Q1 results. Back then, based on its guidance, the company had assumed revenues of between Rs13,680 crore and Rs14,061 crore in the second half of the current financial year.
Based on its latest guidance, revenues in the second half are expected to between Rs13,806 crore and Rs14,020 crore. This goes against street expectations that the strong growth will continue into the second half of the year and the next financial year.
The latest guidance assumes flat growth in the next two quarters. With the street already pricing in high growth estimates, it’s not surprising that Infosys shares have corrected by over 3%.