Infosys shares plunge on weak outlook The Infosys global education centre campus in Mysore. The group has lost more than a fifth of its market value Infosys lost more than a fifth of its market value after disappointing fourth-quarter results and unexpectedly weak revenue guidance dashed hopes of a turnround for India's second-largest software outsourcer by revenue. After a run of substandard figures during 2012, the struggling Indian group had delivered improved results in the third quarter, raising expectations that it might soon make up lost ground on its more successful competitors, notably market leader by sales Tata Consultancy Services. By the numbers: Infosys Share price, revenues and profits But on Friday Infosys, whose results kick off India's latest earnings season, reported net profit of Rs23.9bn ($439m), an increase of just 3 per cent over the same period the year before, sending shares down 21 per cent. Infosys issued revenue guidance for the next financial year of only 6-10 per cent, well below expectations and significantly lower than the projections of 12-14 per cent for the Indian IT industry as a whole, produced by Nasscom, a trade body. The company, which reported revenues of Rs104bn, also surprised investors by declining to issue its typical guidance on future earnings per share, saying volatile external conditions prevented it from making an accurate forecast. The results are a large setback for the IT bellwether, whose management has over the past two years attempted to rejig its strategy under the tagline "Infosys 3.0," partly by expanding its standard IT services product to include more lucrative areas, including management consulting. S.D. Shibulal, Infosys chief executive, explained the poor figures with reference to tough economic conditions facing major global companies, to whom Infosys exports the majority of its services. "The environment will remain volatile, and there are challenges in both the US and in Europe," he told a press conference. Our pricing continues to be under pressure, because of attempts to cut costs and delay decisions from our clients. However, many sector analysts believe weak management also lies behind the company's difficulties, in particular its decision to try to move upmarket at a time when competitors are focusing more aggressively on winning basic IT contracts. "The best times of Infosys are clearly behind them," said Jagannadham Thunuguntla of SMC Global Securities, a New Delhi-based brokerage. Infosys has been synonymous for credibility in Indian capital markets for a generation now, but now their results are generating 10 per cent swings or more in each quarter. It is really worrying a lot of people. The results raised concerns over the health of other Indian IT outsourcers, including TCS and Wipro, both of whom report results next week, while casting a shadow over an Indian earnings season that some analysts suggest could be its weakest since the end of the global financial crisis in 2009. Although companies such as Infosys, which earn most of their revenue abroad, provide limited insight into the state of Asia's third-largest economy, the difficulties of one of the country's most prestigious companies do fit a broader pattern of lacklustre corporate earnings. "Several other sectors including autos, metals and industrials are going to produce very bad numbers, partly because consumption is going down in the economy generally," said Sanjeev Prasad, head of research at Kotak Institutional Equities. I think it's clear it's not going to be a great quarter for anyone.