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Expert Views On Infosys Q2 Numbers

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Infosys, India's No.2 software services exporter, reported a 24 per cent rise in quarterly profit, meeting expectations, due to higher demand for its outsourcing services by Western clients looking to cut costs. Profit at Infosys, whose clients include Bank of America, Volkswagen and GlaxoSmithkline, rose to Rs 2,370 crore for the quarter ended September, from Rs 1,906 crore a year earlier.
 
The company said it expects revenue growth of at least 5 per cent for the fiscal year, maintaining its previous outlook. Infosys cut its view for earnings per American Depository Share to at least $2.97 from $3.03, adjusting it for the currency exchange rate.
 
 
Industry Speak:
The numbers are in line but not the guidance. I think Infosys stock will correct by at least 5 per cent. On the sector guidance... I think most of the analysts are now becoming negative on the IT sector.
-Kishor P. Ostwal, Chairman, CNI Research, Mumbai
 
The numbers are quite disappointing. The company continues to lag its peers. The departure of the CFO will continue to be an overhang on the stock in the near term, although he is not leaving the company. The cut in EPS guidance is specially disappointing.
-Ankur Rudra, Analyst, Ambit Capital, Mumbai 
 
Earnings and revenue guidance is slightly disappointing, on the volume growth the company has done well. We had expected some higher guidance because of Lodestone acquisition, that has not come, we need to see what are the reasons behind that.
-Dipen Shah, Head of Private Client Group Research, Kotak Securities, Mumbai 
 
Operating margins have declined. The lower dollar revenue guidance even after Lodestone acquisition means their business is under pressure. Management changes are additional negatives too.
-Ankita Somani, Analyst, Angel Broking, Mumbai
 
You have had a clear divergence in performances in other large (IT companies) versus Infosys. Our analysts met them (IT companies) last week and they have given such a bullish outlook in terms of longer term view; there seems to be some company specific issues with Infosys, whether they are redoing their strategy or there is a succession issue. Our view is even if growth is an issue (for the IT industry) say in the near term, valuations have already factored that in.
Nilesh Shetty, Portfolio Manager, Quantum Asset Management Company, Mumbai 
 
I have been selling the stock and it's the best time to come out of the stock because the revenue growth in dollar terms is stagnating. Base effect and expected rupee appreciation would further add to the pressures.
-G. Chokkalingam, Executive Director, & Chief Investment Officer, Centrum Wealth Management, Mumbai 
 
Having maintaining their revenue guidance is itself a big achievement for Infosys looking at the global scenario. I think the hard work is over for Infosys, since the U.S. economy is showing signs of improvement and a lot of changes are happening within Infosys itself.
-R.K. Gupta, Managing Director, Taurus Asset Management Company, New Delhi 
 
This is disappointing.
-Kawaljeet Saluga, Executive Director, Kotak Institutional Equities. 
 
(Reuters)