Information technology analysts will closely be watching the FY12 guidance numbers to be furnished by Infosys Technologies, India?s second largest IT services exporter, regarded as the performance barometer for the rest of the industry. Analysts are expecting Infosys to guide for growth ranging between 18-20% on the top line this year, when it announces its fourth quarter and full year results on April 15. Given the demand rebound and pick up in discretionary spending, this might appear conservative but the company has historically revised its guidance upwards during the course of the financial year almost always. ?This time round, for FY12, we expect Infosys to guide 18-20% revenue growth, which is slightly higher than Nasscom?s guidance of a 16-18% revenue growth for FY12. Infosys? initial conservative revenue guidance will leave ample room for an outperformance in FY2012,? brokerage firm Sharekhan noted.
In the last 10 years, on an average, Infosys has outperformed the upper end of its initial revenue guidance by around 820 basis points, the brokerage added. This implies that a guidance of 18-20% would hold good for a 28% growth for FY12. ?
Infosys? full year guidance and management commentary at the beginning of the year is keenly watched by analysts to unravel the discretionary spend momentum in the industry, the demand scenario in large verticals as well as issues such as pricing. The guidance assumes significance this year since the company is in the middle of a restructuring that involves key management changes. Analysts said that anything below 18% growth for the full year will disappoint the Street. ?Analysts from Motilal Oswal said it will watch for the firm?s FY12 guidance, magnitude of wage inflation and its impact on margins, commentary on pricing and discretionary traction.
?The demand environment remains strong and pick-up in sequential growth rates will resume from the first quarter of FY12. Given Nasscom’s estimate of 16-18% growth for the Indian IT industry in FY12, we expect Infosys to guide 18-20% growth for FY12. Our expectation for Infosys? EPS guidance is R143.7-144.7,? the firm stated.