BSE IT Index underperforms after Infosys results

MUMBAI: Shares of Infosys Technologies were witnessing selling pressure after the company announced cut in FY13 earnings forecast and FY13 EPS guidance.

This has led to profit booking in other IT stocks as well. The BSE IT Index was down 3.93 per cent against 0.33 per cent drop on the Sensex. The IT heavyweight was putting pressure on the index. The stock was down 7.13 per cent on the BSE IT Index.

However, analysts believe that other IT major provide better investment opportunities.

“Revenue guidance for FY2013 unchanged disappoints and USD EPS guidance is also cut. The stock remains as our least prefered stock in frontline IT services space,” said Sharekhan report.

“Infosys is suffering from business ramp up issues and the trouble on retaining key employees would only make it difficult for the company to quickly come out of it,” the report added.

It expects stock to get de-rated in the near term and continue to believe that TCS, HCL Tech offer better investment opportunity in large cap IT universe.

Infosys Technologies reported a net profit of Rs 2,370 crore for the quarter ended September 2012, in line with ET Now poll estimates of Rs 2,378 crore. The company had reported a net profit of Rs 2,289 crore in last quarter. The company expects FY13 revenues to be at $ 7.34 billion, up 5 per cent Y-o-Y.

Infosys has cut FY13 forecast for earnings, ADR on forex volatility. The EPS for FY13 has been lowered to Rs 160.1 per share. It sees FY13 sales growth at 17.3 per cent in rupee terms. The FY13 sales forecast has been cut from Rs 40,360 crore set in July.

Infosys cut its FY13 forecast for earnings, ADR on forex volatility.

“For the full year FY2013, the company has maintained its revenue growth of 5% at $7343 million which is disappointing. EPS guidance has been decreased to Rs 160.61 down from Rs 166.46,” the note said.

Among the other IT majors, Wipro was down 1.76 per cent, TCS slipped 0.79 per cent, HCL Tech was 0.81 per cent lower and Tech Mahindra was 0.62 per cent lower.