Infosys warns of challenging times ahead

Warning of challenging times ahead for the software industry, Infosys on Friday forecast a below-expected revenue growth for this fiscal as global economic uncertainties are likely to lead its clients to squeeze budgets.

The country's second largest software and IT services exporter said the fourth quarter of 2011-12 was a difficult one and it could not meet even the lower end of its estimate for the period.

The company's revenue in dollar terms increased 10.5 per cent to $1,771 million for the quarter ended March 31, 2012. However, compared to October-December 2011-12, the revenue declined 1.9 per cent.

Infosys had given a revenue guidance of $1,806 million to $1,810 million for the January-March 2011-12 quarter.

"We have had a very difficult quarter, it has been a challenging quarter for us as we have not met (the) lower-end of the guidance," Infosys CEO and Managing Director S D Shibulal said.

"We have seen unprecedented convergence of multiple events during the quarter. We saw contract delays, delays in some of the anticipated ramp-ups which we had planned and ramp downs in quite a few accounts, especially in financial services and in North America," he added.

The company has warned of challenging times ahead. "The year ahead looks challenging for the IT industry with slow recovery in the global markets...Most budgets are flat or marginally down," Shibulal said.

"While there is visibility on the budgets, we are not getting visibility into the spends specially in the financial services sector," he added.

For FY'13, the company has given a revenue guidance in the range of $7,553 million to $7,692 million, a y-o-y growth of 8-10 per cent.

This is much lower than industry body Nasscom's annual estimate of 11-14 per cent growth for the fiscal.

"We have always said that our guidance is statement of facts, it reflects our reality, our client base, our opportunities that are in the pipeline...So our guidance, even in this year, is a statement of facts as we see it on our reality at this point in time," Shibulal said.

The company shares tanked almost 10 per cent in early morning trade. At 1215 hours, the shares were trading at Rs 2,501 apiece, down 9.06 per cent from its previous close at the BSE.