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Infosys, India’s second largest information technology company, has lowered its dollar revenue growth forecast for 2012-13 to 5 per cent, much lower than 8-10 per cent it had predicted at the end of the March quarter. The sharp revision in revenue growth forecast disappointed investors.

The company on Thursday reported a net profit of Rs 2,290 crore in the June quarter against the street expectation of Rs 2,483 crore. It reported Rs 9,616 crore in revenue, against market expectations of Rs 9,715.2 crore. Infosys had reported sales of Rs 8,852 crore and Rs 2,316 crore in net profit in the January to March quarter.

Infosys shares slumped 10 per cent to Rs 2,234.20 in a weak Mumbai market today. The stock, which has a huge weightage on the BSE benchmark, accounted for the loss of 130 index points. All other IT stocks fell sharply post Infosys results.

"This was on the cards because the US economy is weakening and the company’s growth momentum was weakening. The two have conspired to create a storm," Saurabh Mukherjea, head of equities at Ambit Capital told NDTV Profit.

Infosys, which is battling allegations of visa fraud in the US where it earns most of its revenue, reported a marginal decline in dollar revenue at $1752 million in the June quarter against $1771 million in the previous quarter. This is the most important number for analysts because IT companies earn in dollar terms. 

Indian IT companies are feeling the pain of an economic slowdown in the US and Europe as the American economy fails to pick up steam and the euro-zone flounders in a quicksand of debt. 

The company has not put out an earnings forecast for the second quarter ending September 2012 for the first time ever, a sign of the increasing uncertainty in global environment.

"It’s no surprise. The best is over for Indian IT companies... These results are a preview of what we may see from Wipro, Cognizant," Trip Chowdhary of Global Equities Research told NDTV Profit.

Management speak

“Our focus on Infosys 3.0 and building tomorrow’s enterprise coupled with disciplined execution will help us deliver high-quality growth, despite challenges seen in the global economic situation resulting in slower IT spends by large corporations,” S D Shibulal, CEO and managing director of Infosys said.

Here are the results in numbers:

1) The company has forecast FY13 earnings per share at Rs 166.5, which is lower than estimates.

2) Ebitda margins, a key measure of profitability, declined 190 basis points sequentially to 28 per cent against estimates of 30 per cent.

3) It added 51 new clients in the June quarter.

4) The attrition rate rose marginally to 14.9 per cent from 14.7 per cent (quarter-on-quarter).

5) Consolidated employee cost stood at Rs 5,260 crore against Rs 4,245 crore (QoQ).