Infosys Q1 profit after tax seen up 5.7% to Rs 2448 cr

Revenues are expected to go up by 9.18% to Rs 9,665 crore from Rs 8,852 crore during the same quarters (That seems quite higher than the guidance of Rs 9011-9100 crore).

But in dollar terms, revenues are likely to be flat USD 1,771 million while the guidance is 0-1% at USD 1,771-1,789 million.

Earnings before interest and tax are seen going up by 13.26% QoQ to Rs 2,998 crore and EBIT margin is seen improving at 31% versus 29.9% during the same period.

Analysts expect earnings per share at Rs 42.63 as against 40.54 QoQ, but Infosys has guided at Rs 36.89, down 9%.

After the fourth quarter numbers in April, the stock crashed from Rs 2800 to Rs 2400 (in two days) due to weak results and weak Q1 guidance.

FY13 guidance expectations

Majority of analysts feel the company may reduce its FY13 dollar revenues guidance to 6-8% or 7-9% as against earlier guidance of 8-10%. Kotak Institutional Equities expect that to be 5.5-7.5%.

If its full year guidance is 6-8%, then company needs 3.3-4.6% QoQ growth over the next three quarters. Hence, the Q2 guidance is expected to at 3-4%. However, if the guidance remains at 10%, then it needs 5.8% QoQ growth over the three quarters, which looks impossible.

Earning per share is likely to be higher at Rs 175-185 as against Rs 158.76-161.41 on lower rupee rate. Rupee closing rate at the end of first quarter was at 55.6 to the US dollar as against guidance assumed rate at 50.88.

The rupee EPS guidance will be seen in the context with wage hikes. With wage hike, EPS guidance is expected to be at Rs 175-182 while without wage hike, guidance is seen at around Rs 185

Company may forecast dollar revenues growth of 3-4% for the second quarter. More than 5% plus growth will be seen as a positive while less than 3% seen as a negative.

FY13 guidance given by Infosys last quarter

Company expects a growth of 8-10% in dollar revenues at USD 7553-7692 million

Earning per share will grow in range of 4-5.7% to USD 3.12 to USD 3.17

Revenues (in rupee terms) will grow by 13.9%-16% to Rs 38,431-Rs 39,136 crore

Earnings per share forecasted at Rs 158.76 to Rs 161.41, a growth of 9.1% to 10.9%

Q1 expectations

Reported dollar revenues are seen flat due to impact of cross currency and subdued volume momentum

Constant currency growth seen at around 0.8-1% while guidance was 1-2%

Rupee revenues, margins and EPS will be higher due to fall in Indian rupee

Margins may be higher by 110 basis points due to a) no wage hike and b) Rupee benefit

Indian rupee has fallen by 7.4% against the US dollar

Volume growth expected to be tepid while pricing may be stable