Infosys Technologies Limited (NASDAQ: INFY) turned in its revenue growth and its expectations for 2011 to 2012.  The results would be considered somewhat robust by most US standards of late.  Unfortunately, Indian growth has to be higher than this for investors to keep their interest up.  This was also on the heels of a 1.6% drop in India’s BSE SENSEX for local equities.

We would also be watching these two:

• Wipro Limited (NYSE: WIT) with a $36 billion market cap in the same space of IT-outsourcing in India. Wipro is indicated down around $14.20 on no volume as of yet versus a close of $15.85 yesterday and versus a 52-week trading range of $11.30 to $16.81.
• Cognizant Technology Solutions Corp. (NASDAQ: CTSH) is technically US-based but has many employees for the same sort of work outside of the United States (including India and many other countries).  Volume is thin, but Cognizant shares are indicated at just under $79.00 versus an $80.78 close on Thursday and versus a 52-week trading range of $45.85 to $82.86.

The IT-outsourcing outfit reported that its fiscal fourth-quarter earnings translated to $0.70 EPS per ADR after revenues grew about 23% to $1.6 billion.  Thomson Reuters had estimates of $0.70 EPS and $1.63 billion in revenues.

The company also issued some mixed guidance for the first fiscal quarter.  It now sees earnings at $0.62 to $0.63 on implied revenues of about $1.64 to $1.66 billion.  Where the problem arises is that Thomson Reuters is calling for estimates of $0.69 EPS and $1.65 billion in revenues. 

For Fiscal-2012, earnings guidance is $2.83 to $2.88 in earnings per ADR and revenues are being forecast at $7.13 to $7.25 billion in revenues.  Thomson Reuters has consensus estimates of $3.10 EPS per ADR and $7.25 billion.  The company’s stance is that it expects the demand environment for its IT services “to be normal this year” in its sector.  Normal?  In short, the company is not seeing a jump up in business and it is asking you to trust what is obviously a back-end loaded year.  Even if the summer months are traditionally not robust in IT, software, and hardware spending, asking investors to be patient and to trust guidance seems a bit much when you consider the markets.

Infosys continues to add to its headcount, with a gross employee additions of 8.930 in the quarter to a whopping 130,820 employees.  The company ended its quarter and fiscal year with right at $3.8 billion in cash and cash equivalents versus what was a $41.7 billion market cap as of yesterday’s close. 

There are two key departures from the Infosys board of directors that investors will want to consider.  Mr. K. Dinesh is co-founder and he is leaving after the annual meeting; Mr. T. V. Mohandas Pai is also leaving after the annual general meeting in June.

Infosys shares at 8:00 AM EST are indicated down around $67.00 on thin volume in pre-market trading after a $73.01 close yesterday and the 52-week trading range is $53.28 to $77.92.

JON C. OGG

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