It was another quarter of shattered expectations for Infosys investors. The IT bellwethers first quarter financial results evoked fierce market reaction on Tuesday as its stock fell more than 5% on operating margins declining more than expected and muted guidance for the current quarter.

Analysts Nimish Joshi and Bhavtosh Vajpayee of CLSA, in their report, said a lot of investor expectations had hinged on Infosyss June quarter performance but with that dashed; its downside risk had heightened more than ever before.

After the big miss in the March quarter, Infosys needed a solid quarter to revive investor confidence in the stock. Unfortunately, the June quarter has failed to provide that. The 4.3% quarter-on-quarter growth in dollar revenues came ahead of Infosys own guidance but fell well short of street expectations, which had inexplicably risen over the past two weeks, they wrote.

Most analysts have now set their sights on the September quarter for positive signals. However, going by Infys numbers in the June quarter, they are not raising their hopes on its recovery anytime soon.

Street hopes now rest on a big outperformance in September quarter and we would advise caution here. Outperformance in September quarter is required to just meet the FY12 expectations and we will not construe that as an incremental positive. Rather, risk remains on the downside, the two analysts said.

Even analysts Viju K George and Amit Sharma of J P Morgan, who were expecting Infosys first quarter of the current fiscal to be the beginning of a comeback after the recent restructuring, believe it would be difficult for the firm to achieve back-ended growth in the tough macro environment.

Infosys has also not raised its dollar revenue growth guidance for FY12 and has assumed a conservative tone with regard to its 2Q revenue guidance. This puts the onus on second half of FY12 to deliver on revenue growth guidance - never easy in the backdrop of a tough macro environment, they said.

Infosys CEO S Gopalakrishnan said the company has not raised guidance as global macro-economic situation continued to remain challenging.

Though growth has returned and IT budgets are same, the concern is over when the spending would happen, especially discretionary spending as there is delay in decision-making due to uncertainty, inflation and sovereign debt crisis in Europe, he said.

Citi analysts Surendra Goyal and Vishal Agarwal of Citi are also surprised by no guidance change despite the company beating its upper guidance.

What does the guidance now imply? If Infosys delivers around 6% qoq in Q2, the FY12 guidance (higher end of 20%) now implies around 5% growth in Q3 and Q4, which may be difficult to beat meaningfully given the seasonality associated, said Goyal and Agarwal in their note.

The company has also projected reduction in full year operating margin decline guidance to 250 basis points against 300 bps earlier. For the June quarter, Infys operating margins were 26%, which declined 290 bps from the previous quarter due to wage hikes. Its revenues in rupee term grew 3.3% sequentially and 4.3% dollar terms ahead of its guidance of 3.6%.

The companys pricing was flat on a blended basis as offshore and onshore billing rates decreased 1.6% and 0.3%, respectively. Its reported attrition was at 15.8%, down sequentially from 17% and net addition was lower at 2,740 as compared to 3,041 in the fourth quarter.