Infosys lowers guidance – and changes CFO

It was another lacklustre quarter for the now somewhat tarnished ‘execution gold standard’ for Indian offshore services, Infosys, as the company yet again reduced its outlook for the year and saw the 'repurposing' of its CFO.

Headline revenue growth slowed again, by 2.9%, to $1.8bn and operating margins trimmed by nearly 2 points yoy to 26.3%, 160bps lower than the prior quarter. Management technically maintained its FY outlook in USD terms but in local currency the company now sees revenues growing at 17.3% rather than the 19.7% previously predicted. Expected earnings are also lower, with EPS growth at 10.3% rather than 14.4%. These forecasts exclude the contribution from recently acquired ‘Swiss Axon’, Lodestone (see here).

Infosys stalwart V. Balakrishnan is to change jobs at the end of the month after six years as CFO. He will now take care of other parts of the business, while VP Finance Rajiv Bansal will step up to the top finance job. More a symbolic falling on a feather than falling on a sword, I guess, and unlikely to assuage market concerns on ‘whither goest Infosys’.

More after we hear from Infosys’ peers, who start reporting next week.