After the IT services exporter’s disappointing revenue guidance, Infosys Ltd (INFY.NS) shares fell over 15% on Monday, dragging peers’ equities.
After a dismal quarterly report from larger rival Tata Consultancy Services (TCS.NS), Infosys’ outlook raised concerns for the industry, which receives over 25% of its sales from the U.S. and European banking, financial, services, and insurance sectors.
After two mid-sized U.S. lenders collapsed in March, the government took exceptional measures to reassure depositors and stabilize the system.
Infosys saw its worst intraday percentage decrease since October 2019, dragging down other IT stocks and the Nifty IT index (.NIFTYIT) by 7.6%.
India’s second-largest IT services provider said Thursday it expected revenue growth of 4%-7% for the fiscal year ending March 2024, significantly below analysts’ projections of 10.7%, after clients avoided spending due to recession fears. The weakest growth was 5.8% in fiscal 2018.
“Given the uncertain environment in the near term, growth can be back ended for Infosys, in our view,” PhillipCapital stated.
According to Refinitiv IBES, the Bengaluru-based company’s January-March net profit of 61.28 billion rupees ($748.21 million) missed analysts’ forecasts of 66.24 billion.
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