The Hindu Business Line : Infosys may miss Q1 rupee revenue guidance

Bangalore, July 10 The rise of the rupee against dollar may prompt Infosys Technologies to raise its dollar-term earnings guidance for financial year 2008. However, the company is likely to fall short of its revenue projections in rupee terms for the June quarter.

Infosys will announce its June quarter earnings on Wednesday. Analysts expect Infosys to post a net profit of around Rs 970-980 crore. Revenues for the quarter are projected to grow upwards of Rs 3,800 crore between Rs 3,833 crore and Rs 3,884 crore.

In April, Infosys had projected its June quarter revenues to grow by 29.2-29.8 per cent to Rs 3,896 crore and Rs 3,913 crore. The guidance was based on a conversion rate of Rs 43.10 to a dollar.

The rise of rupee against dollar in recent months has emerged as a biggest challenge for the country’s software companies. The rupee has risen by 6.8 per cent against the dollar in the June quarter to Rs 40.72, and is expected to have a significant impact on the IT firms’s operating profit margins (OPM).

It is estimated that a one per cent rise in the rupee against dollar would impact the IT firms’ OPMs by 30-50 basis points.

In the case of Infosys, the salary hikes effected for both onsite and offshore employees coupled with visa costs would impact the company’s first quarter OPMs. Infosys is likely to rely on improved productivity through higher utilisation coupled with controlled sales, general and administrative expenditure and strong volume growth and pricing improvement to offset the impact on the OPMs.

Citigroup expects Infosys’ Q1 operating profit margins to fall by 380 basis points compared with 27.5 per cent in the previous quarter.

Credit Suisse expects Infosys to miss its June quarter, rupee-based revenue guidance and lower its full year-based EPS guidance. However, Credit Suisse expects Infosys to exceed and raise dollar-based guidance.

More Stories on : Software | Performance | Infosys Technologies Ltd | Forex

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Centre to pay $326 a tonne for 5.11 lt of imported wheat

US steps up criticism over wheat import norms

Wind shear may limit strength of new ‘low’

Plant quarantine norms worry Canadian pulse suppliers

SEZ hopes fuel Hindustan Organic Chem

GoM meeting on spectrum put off till Sept

Infrastructure sector posts 8.7% growth in May

Gas producers, consumers present case on pricing

Reliance Energy plans Rs 60,000-cr investment

Coal India move to fight corruption in procurement

HDFC Bank posts 34% rise in Q1 net profit

Infosys may miss Q1 rupee revenue guidance

Tatas picking up stake in Development Credit Bank

GMR consortium bags Istanbul airport contract

SEBI makes fund raising by Govt infrastructure cos easy