The second-largest IT services company in the country, Infosys Technologies Ltd., saw a sharp and unprecedented decline in share prices, registering by the end of Friday a decline of 21.33 per cent in value and a loss of Rs. 36,000 crore for the company in market capitalisation.
This, market analysts have said, is the first time in a decade; the last time Infosys shares took a dive was on April 4, 2003. The Bangalore-based IT major, which raised hopes with its performance in the last quarter ending December 31, 2012, announced its results on Friday morning. With a low and wide-ranging revenue guidance (or forecast) for 2013-14, pegged at six to 10 per cent (far below the industry average of 12 to 14 per cent) and the 2012-13 results falling short of its own predictions, the IT bellwether painted a cloudy and dismal picture for the ‘sunshine’ sector. The company registered a net profit of Rs. 2,394 crore in 2012-13, which is up by 3.4 per cent over the previous year.
The outlook is as gloomy for tech job aspirants as it is for investors. Days after NASSCOM said that job creation in the sector is likely to drop from 1.8 lakh in the previous fiscal to 1.3 lakh jobs, Infosys’s employee metrics revealed a similar picture. The 1.56 lakh-strong IT company has added only 8,990 employees, compared to 10,676 in the same period last year. Worse, attrition is up from 5,770 in the quarter ending March 2012 to 7,931 in the current quarter; however, the company does not differentiate between voluntary attrition and lay-offs.
In the wake of nationwide protests against rival and IT major HCL Technologies for deferring joining dates for campus recruits, Infosys, which has also deferred placements, made it clear that it would stick to its commitment. “We had informed recruits in advance, and all of them (around 10,000) will be on-board by September 2013. The others (recruited later) will be taken thereafter,” Infosys CEO S.D. Shibulal said.