FIIs darling in India, Infosys has been deserted for the past quarter since the appreciation of the Indian rupee. Ahead of its results tomorrow, the stock is up 3% at Rs 2,120. Infact all the IT stocks are up on expectation of earnings revision since the cost of VISA pressure is accounted for in Q1.
A total of seven brokerages expect a between 0.58% fall to a 4.6% rise in Infosys’ consolidated net profit as per Indian GAAP to between Rs 1,072.70 crore to Rs 1128.70 crore in Q2 September 2007 compared to net profit of Rs 1,079 crore Q1 June 2007. They expect a between 6.8% to 9.7% growth in Infosys’ revenue at between Rs 4,028.60 crore to Rs 4,138.40 crore in Q2 September 2007 compared to revenue of Rs 3,773 crore in Q1 June 2007.
Infosys had cut EPS guidance in rupee terms to a growth of 15.6% to 16.8% compared to the earlier guidance of 20% to 22% growth. It had also slashed revenue guidance in rupee terms to 16.9% to 18.3%, from earlier guidance of a growth of 22.6% to 24.6%.
All the IT stocks are up on high expectations from Labour Arbitrage IT Services Company. Our analyst is of the view that, the rupee saga will continue and put pressure on IT services companies. Infact it is best to explore other companies such as Capital Goods, Construction and Finance in India.