Infosys ups guidance for Q2 and FY 06-07
12 Jul 2006
Buoyed by the strong growth in demand for IT services in the US and Europe, Infosys Technologies has revised upwards its guidance for the second quarter ending September 2006 and full year 2006-07.
Guidance for July-September 2006| Indian GAAP
| US GAAP | |
| Revenue range | Rs3,257 Rs3,280 crore | $710 - $715 million |
| Revenue growth y-o-y | 42 % - 43 % | 35.5 % - 36.5 % |
| EPS range | Rs29.47 Rs29.78 | $0.64 - $0.65 per ADR |
| EPS growth y-o-y | 32.4 % - 33.8 % | 25.5 % - 27.5 % |
Guidance for 2006-07
| Indian GAAP | US GAAP | |
| Revenue range | Rs13,350 Rs13,400 crore | $2.91 - $2.92 billion |
| Revenue growth y-o-y | 40.2 % - 40.7 % | 35.4 % - 35.9 % |
| EPS range | Rs124.51 Rs125.74 | $2.70 - $2.73 per ADR |
| EPS growth y-o-y | 38.3 % - 39.6 % | 32.4 % - 33.8 % |
The revised guidance is much better than analyst expectations. Most analysts were forecasting significant margin pressures as wage costs have gone up significantly and pricing pressures are expected to set in later in the year.
Markets are very enthused by the upward revision in guidance as Infosys has a well established track record of consistently exceeding its guidance. If other technology companies can also come up with similar outlook, the markets may find enough strength to recover a substantial part of the losses incurred during the May-June correction.