2013:IT’s looking down the barrel
The cascading effect was set off by Cognizant, the US headquartered IT major with a substantial Indian presence. In a SEC filing the Nasdaq-listed firm said it will pay top executives a 100% performance linked stock options if its revenues touched the $8.51 billion mark in 2013. However, a back-of-the-envelope calculation revealed that this would result in a growth of only 16%, much below its expected growth of 20% this year.
This was indeed surprising because Cognizant was one company that was zooming off on a fast lane, leaving most Indian IT firms behind. The news of Cognizant taking a conservative stance surprised the industry and a few alarm bells rang.
This was soon followed by statements from the Infosys top management about the need to drive down estimated revenue projections. During discussions with analysts recently, Infosys said the company may miss its organic growth guidance of 5% for the current year because of delays in decision-making by certain key customers and ramp-downs in certain projects. Then it also mentioned something unique—the impact of Hurricane Sandy.
Barclays has projected a 3.8% revenue growth for Infosys this fiscal and that’s bad news for investors. The guidance however does not take into account, revenues generated out of Lodestone, the Swiss firm that Infosys acquired in
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