IT major Infosys started off the financial year on a tepid note as it missed analysts' expectations on topline front for the quarter ended June 2016 while the bottomline was in-line. Profit in Q1 declined 4.5 percent sequentially to Rs 3,436 crore while revenue increased 1.4 percent to Rs 16,782 crore. Revenue in dollar terms grew by 2.2 percent to USD 2,501 million and constant currency dollar revenue growth stood at 1.7 percent compared with preceding quarter. Major disappointing news for the stock, which lost 10 percent intraday, was that the country's second largest IT services exporter lowered its constant currency revenue growth guidance to 10.5-12 percent from 11.5-13.5 percent. This is slightly similar to NASSCOM's industry guidance of 10-12 percent. "Miss on revenue growth is not the best way to start the year, says Nilesh Shah of Envision Capital, adding the meeting guidance can now be a bit of challenge for the company. Profit was estimated at Rs 3,447 crore (down 4.2 percent) on revenue of Rs 17,089 crore (up 3.25 percent) for the quarter. Dollar revenue was expected at USD 2,547 million, according to average of estimates of analysts polled by CNBC-TV18. Infosys's earnings before interest and tax (EBIT) in Q1 fell 4 percent to Rs 4,047 crore and margin contracted by 138 basis points to 24.12 percent compared with preceding quarter, which were slightly above estimates due to controlled operational expenses. Selling and marketing expenses increased only 1.2 percent and administrative expenses declined 2.2 percent on sequential basis. A CNBC-TV18 poll estimated EBIT at Rs 4,076 crore and margin at 23.85 percent for the quarter. Meanwhile, Infosys' global head of Mana & CIS, Samson David has resigned, according to sources that told CNBC-TV18 yesterday. Mana is company's knowledge based artificial intelligence platform. At 10:20 hours IST, the scrip of Infosys was quoting at Rs 1,065.00, down Rs 110.85, or 9.43 percent amid high volumes on the Bombay Stock Exchange.
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