Leading IT company Infosys Ltd declared its fourth quarter and full year results for the financial year 2012-2013. Major brokerages are calling the performance a disaster. Here are a few reasons why? The revenue growth was lower than the guidance. The operating margins were the lowest in history. The company saw an increase in attrition levels. Most importantly it gave growth guidance for next year which is lower than NASSCOM's guidance for the entire industry. Also, it declined to give earnings guidance.

The common word in all these negatives is 'guidance'. The guidance was so important that the stock markets penalized the company's stock. It ended yesterday's trading session down by over 20%. One wonders whether such a decline was necessary.

The investors and brokerages appear to be taking a short term view of Infosys. Let us not forget that a company that derives a large portion of revenues from US and Europe is likely to face a decline. These regions are witnessing tough times which should have an adverse impact on companies that depend on them for earnings. One may argue that Infosys could have done better to manage this. It could have looked at emerging markets or even India for that matter. We agree that it could have done better. But that is not to say it did too bad. Penalising a stock for poor earnings and guidance over a few quarters or even a year for that matter is nothing but taking a myopic view we believe. The fundamentals for the Indian IT industry are strong over the long term. And Infosys is a company that has the necessary cavalry to take advantage of these opportunities. It is necessary to take a long term view of a company when investing in it. If you believe in the long term story then such declines just provide good opportunities to invest more in the stock.