Infosys FY13 revenue outlook under threat: UBS

1 Author : December 7, 2012 0

Infosys’ dollar revenue growth outlook of 5 percent for the year ending March 2013 could be under threat, Chief Executive S.D. Shibulal was stated as saying by UBS in an investor meet.

Customer deferrals, ramp-downs in a few large projects, delays in large deal closures and longer-than-expected client shutdowns due to Hurricane Sandy, especially in the manufacturing sector, may cause threat to outlook, says a UBS note.

UBS says it is not surprised by potential outlook cut, but fears its own revenue forecast for the company at 3.8 pc may be hurt as it had not factored in the impact of Hurricane Sandy.

“Our conversation with Infosys reinforces our concerns on near-term pressures on guidance. This is likely to impact stock price over the near term, but we see limited downside from current levels given the low expectations and cheaper valuations,” says the note.

Nomura says possibility of an organic revenue growth outlook cut in the third quarter of current fiscal year remains high. It prefers companies with current business momentum like HCL Technologies, Cognizant Technology Solutions and Tata Consultancy Services.

UBS, Nomura both retain “Neutral” rating on Infosys stock. An Infosys spokeswoman did not have an immediate comment.

Meanwhile on December 6, 2012, IT companies shares tumbled by over 3 per cent after Cognizant filed in a US exchange. Infosys shares were at Rs 2,338.50 on BSE while TCS was down 1.14 per cent.

Even Hexaware Technologies has revised its revenue outlook for the year ending December 31 and has partly attributed it to hurricane Sandy.

Due to some unexpected changes in a project plan in a large engagement for a customer, Hexaware now expects the revenues for Q4 2012 to be US $ 92.0 million at the same exchange rates as earlier. “The relationship with the client remains solid. All other projects and initiatives with the client continue unchanged and on track. The Company remains on course to deliver above industry revenue growth over the medium term,” said P. R. Chandrasekar, Hexaware Technologies’ CEO and vice chairman.

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