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Infosys May Cut FY13 Guidance To 6-8 Per cent: Jefferies

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Banking group Jefferies said on Friday that software giant Infosys may cut its guidance for the current financial year to 6-8 per cent from the current 8-10 per cent.

Jefferies in its report has cited delays in IT spending from Infosys' clients and adverse cross currency movements as the reason for this outlook.

The report comes at time when other analysts have warned of rising risks to Infosys as global corporates cut IT spending.

The recent foreign exchange volatility also has analysts worried.

At 03:12 PM, shares in Infosys were trading at Rs 2475.10, down 0.69% on the Bombay Stock Exchange.

Earlier this week ET had reported that Infosys may be forced to pare its already low growth guidance due to the wild swings of global currencies, including pound sterling, Australian dollar and euro, against the US dollar - the currency in which Infosys forecasts growth.

BNP Paribas, HSBC and Prabudhas Lilladher - have flagged the possibility of cross-currency fluctuations forcing Infosys to lower its guidance.

Based on current exchange rates, analysts estimate that Infosys' sales growth forecast of 8-10 per cent may be impacted between 1 per cent and 1.5 per cent. However, this could change depending on these currencies' exchange rate versus dollar during the course of the fiscal year.

Among the top Indian software services companies, only Wipro provides growth guidance, but only for a quarter and not the full year, like Infosys.

New Jersey-based Cognizant Technology Solutions gives full-year guidance, but gets over 75 per cent of revenues from the US. To that extent, the company is less impacted by cross-currency fluctuations.

"At the current currency rates (GBP/USD, EUR/USD, AUD/USD) the USD top line growth is likely to be impacted by near 1.5 per cent for the full-year," wrote Yogesh Aggarwal and Karthik Subramaniam of HSBC Securities in a client note last week. "In that regard, fiscal year 2013 guidance may have to be adjusted downwards."

Industry body Nasscom has guided for a 10-14 per cent growth for the sector while Cognizant recently revised its growth forecast down to 20 per cent, from 23 per cent earlier, in the year to December. 

(Agencies)