Worst is over for Infosys: experts

However, cautious on the future, say lot needs to be done by the company

India’s second largest IT services company Infosys today reported a net profit of Rs 2,374 crore for the first quarter of FY14, up 3.7% when compared to the corresponding quarter last year.

On a sequential basis, the Bangalore-based company’s net profit for the first quarter of FY14 witnessed a marginal decline of 0.8% while the revenues witnessed a growth of 7.8%.

The company also retained its dollar revenue guidance for FY14 at 6-10%.

Commentary:

Phani Sekhar, fund manager, Angel Broking, Mumbai

"Generally you can conclude that the worst is over for them but it remains to be seen how quickly they can recover from here. We need to watch whether the management sees any air pockets going forward.

"You can ascribe it to Murthy magic. If they have deviated from their Infosys 3.0 strategy to focus on more mundane work at a lower price to bump up volume, that would be a good strategy and you can expect that kind of pragmatism from Murthy."

Tarun Sisodia, director, Chanakya Niti Pvt. Ltd, Mumbai

"This is far better than what some people in the market were expecting. The earnings have been pretty volatile in the last few quarters and this time around the expectations were muted given what has happened in the company recently.

"I think the stock should now go for re-rating."

Sandip Sabharwal, CEO, Portfolio Management Services, Prabhudas Lilladher, Mumbai

"It's a good start for earnings season. Infosys has beaten our lowered expectations. Guidance has been maintained and I think rupee guidance would be beaten as well.

"One shouldn't be too euphoric though for the stock as there are a lot of management and structural changes that need to happen."

Jagannadham  Thunuguntla, Equity Head, SMC Global Securities, New Delhi

"A number of factors seems to have worked in their favour including a weaker rupee, Murthy coming back at the helm and the U.S. economy looking up a bit. The stock was trading at a sharp discount to its peers on P/E multiples and this is the push the stock needed."

Phani Shekhar, Fund Manager, Angel Broking, Mumbai

"Generally you can conclude that the worst is over for them but it remains to be seen how quickly they can recover from here. We need to watch whether the management sees any air pockets going forward.

"You can ascribe it to Murthy magic. If they have deviated from their Infosys 3.0 strategy to focus on more mundane work at a lower price to bump up volume, that would be a good strategy and you can expect that kind of pragmatism from Murthy."

Tarun Sisodia, Director, Chanakya Niti Pvt Ltd, Mumbai

"This is far better than what some people in the market were expecting. The earnings have been pretty volatile in the last few quarters and this time around the expectations were muted given what has happened in the company recently.

"I think the stock should now go for re-rating."

Sandip Sabharwal, CEO, Portfolio Management Services, Prabhudas Liladher, Mumbai

"It's a good start for earnings season. Infosys has beaten our lowered expectations. Guidance has been maintained and I think rupee guidance would be beaten as well.

"One shouldn't be too euphoric though for the stock as there are a lot of management and structural changes that need to happen."