'Infosys numbers tad below expectations'

Gaurang Shah, AVP, Geojit BNP Paribas Financial Services shared his view with Krishna Merchant on the Infosys Q4 numbers and the outlook going ahead.

Were the results of Infosys Technologies in line with your expectations?

Well, the results were tad below expectations. At Rs 3306, if Infosys had delivered 25-30% topline and 15-20% bottomline growth, we could have seen more upside on the stock. The scrip is down 7% due to profit booking.

The management in the initial commentary had said that business environment is on the stickier side and billing rate will not trend upwards, although the discretionary spend has gone up.

Also Mohandar Pai and co-founder K Dinesh have resigned from the board. The markets await more clarity on this development.

The volume growth has been muted in the March 2011 quarter. Do you feel demand environment will improve going forward?

Whether the discretionary and IT spend will witness a sizable mark up remains to be seen. Going ahead, the most important factor to watch out is quantitative easing-2 (QE2) review in June 2011. One also needs to see whether there will be QE3.

There are going to be a lot of concerns as revenues are driven by Europe and the United States. If atmosphere over QE becomes negative, it will be a cause for concern.

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