Infosys’ 2.3% constant currency growth was a positive surprise; not sure why guidance was cut: Mahantesh Sabarad

economictimes.indiatimes.com:

Mahantesh Sabarad, Independent Market Expert, says “I do not think guidance revision will lead to a massive derating in EPS estimates but potentially expectations from Infosys will get further delayed. Most of the analysts would roll forward their estimates and look at a better EPS and therefore with the lower multiple assigned, virtually retain the same target price. Something similar is likely to happen. I do not see any major upgrades coming in per se in terms of either EPS or target prices from analysts.”


For Infosys. revenue has come in at 2.3% sequential growth. Margin has seen a 40 bps expansion at 21.2% and we are also looking at a TCV of around $7.7 billion. But, of course, the biggest headline is the guidance cut on the upper end. Your take.
These results seem to be all right and 2.3% constant currency growth is a bit of a positive surprise and the deal wins are also very good. I am not too sure why the guidance has been tempered down. I guess like TCS, they are also facing a bit of execution issue ramp downs and late ramp-ups are likely to happen ahead. That seems to be the broader issue for the entire industry per se.

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Yes. Are you a bit disappointed in terms of the revision in terms of the guidance and do you think this will drive a further de-rating because after the last couple of quarters, the stock had seen a massive derating in terms of the EPS expectation. Are we in for another round?
No I do not think this will lead to a massive derating in EPS estimates but potentially expectations from Infosys will get