Infosys expecting IT spending to slow down ahead; trims revenue guidance for FY12

Infosys trims revenue guidance for FY12
India's second largest software exporter, Infosys Ltd has trimmed down revenue guidance for the fiscal ending March 31, 2012, on account of slower growth in developed markets coupled with the European crisis.

Infosys has reduced its FY12 dollar revenue guidance to 16.4 per cent as against earlier guidance of 17.1-19.1 per cent.

However the company raised its EPS outlook for FY12 to Rs 147.13 as against Rs 143.02-145.26 earlier, but analysts had expected it at around Rs 150, thus strengthening the fears of slowdown.

The revenues in rupee terms are expected to be in the range of Rs 34,273 crore and Rs 34,294 crore; YoY growth of 24.6 to 24.7 per cent. Revenues had posted an increase of 25.8 per cent during FY11.

Experts stated that even though the margins and profits in Q3 FY12 numbers were in good shape, but a slump in global IT spending is expected during 2012, which is expected to wash away the higher revenues secured through rupee's depreciation.

Even a report from international research agency states that this year IT spending would rise by 3.7 per cent, which was earlier estimated to rise at 4.6 per cent.

“The global economy, driven by slower growth in developed markets coupled with the European crisis, could impact the growth of the IT industry," said S. D. Shibulal, CEO and Managing Director.

Dion Global Solutions Ltd

Read more about: infosys, revenue, euro zone
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