Analysts are divided on how they expect IT major Infosys to perform in its first quarter of 2007-08. Most expect the company to miss its rupee-based revenue guidance for the April-June period, while meeting the dollar-based guidance, as the IT bellwether declares its first quarter results for the current fiscal on Wednesday.
For the quarter ending June 30, Infosys expected its income to be in the range of Rs 3,896-3,913 crore?year-on-year growth of about 29.8%. It gave an earning per share guidance of Rs 17.84, which analysts see the company missing narrowly.
?As the rupee strengthened from Rs 43.10 against the dollar on March 31 to Rs 40.60 on June 30, it will significantly affect rupee-based revenues and margins of Infosys, which gave its guidance at Rs 43.10/$,? said a Mumbai-based analyst.
However, Harminder Gandhi of Brick Securities says results are expected to be good because rupee appreciation is just a one-quarter phenomenon while dollar revenue growth will actually tell the future as IT companies bill in dollars.
According to brokerage firm Sharekhan, Infosys is expected to cut earnings growth guidance by 3-4% in rupee terms. The growth guidance in dollar terms may be revised upwards on the back of strong demand.
Infosys had given wage hikes to employees from April 1, which is likely to affect the financials. An average hike of 14-15% for offshore employees and 3-5% for the onsite workforce will impact operating profit margins by 250-350 bps.
Credit Suisse expects Infosys to revise downward its rupee-based EPS guidance for the current fiscal by 2-4% to Rs 77-80 from Rs 81.58.