Infosys' guidance, indicating slower earnings growth due to the recession in the US and pricing pressures, prompted investors to dump the stock in morning trades.

The scrip of the tech bellwether plummeted 15.5% to Rs 3,510 in just about an hour's trading as a result. It fell even lower to Rs 3,470 earlier. Around 400,000 Infosys shares were traded on BSE thus far. Ahead of the results, the stock witnessed alternate bouts of buying and selling, moving in a range of Rs 4,000-Rs 4,400. The market was expecting a muted guidance from Infosys in any case.

For Q1 ending 30 June 2003, Infosys has said that EPS will be between Rs 38.60 and Rs 38.80 (non-annualised) compared to the EPS of Rs 39.11 recorded in Q4 ended 31 March 2003. The company has forecast marginal revenue growth in Q1 at Rs 1,033-1,043 crore (Rs 10.33-Rs 10.43 billion) compared to Rs 1,020 crore (Rs 10.2 billion) in Q4 of 2002-03.

For the full year 2003-04, the company has projected an EPS of between Rs 162 and Rs 164 (non-consolidated) as compared to the EPS of Rs 144.68 recorded for FY 2002-03. This implies a growth of 11.9% to 13.3% for the full year . IT analysts have deemed the guidance as quite disappointing .

Income from software development services is expected to be between Rs 4,484 and Rs 4,565 crore, (Rs 45.65 billion) indicating a 23-26% growth over the Rs 3,62.69 crore (Rs 36.26 billion) recorded in FY 2002-03.

The challenging external environment (including the recession in the US), pricing pressures, competition and uncertainty due to the incidence ofr SARS as also the US-Iraq war have been cited as responsible for the muted earnings guidance by the software bellwether.

Fiscal 2002-03 was a challenging year for the Indian software industry said Nandan M Nilekani CEO, President & Managing Director. "The global delivery model has become mainstream as offshore outsourcing gains momentum. However, uncertainties relating to the US economy continue to have an impact on industry growth."

Infosys added 28 new clients in Q4 compared to 23 clients it added in Q3.

For the fourth quarter, the Bangalore-based software major posted a 23% rise in net profit to Rs 259 crore (Rs 2.59 billion) on net sales of Rs 1,020 crore (Rs 10.2 billion).

The company's quarterly net profit growth of 23% came in on the lower side of estimates by capitalmarket.com (in an analysts poll) - a 23-33.6% rise in net profit to Rs 259-281 crore (Rs 2.59-Rs 2.81 billion) and sales of between Rs 980 crore (Rs 9.8 billion) and Rs 1,043 crore (Rs 10.43 billion), up 44-53.3%.

The company, itself, had predicted a net profit of Rs 259-261 crore (Rs 2.59-Rs 2.61 billion) and an income from software development services and products of between Rs 975 crore (Rs 9.75) and Rs 989 crore (Rs 9.89 billion).

BSE code: 500209