The guidance cut came as a surprise to investors because the IT company had previously decreased its growth outlook substantially in the Q1FY24.
Infosys has lowered its upper-end full-year revenue growth projection, now expecting growth within the range of 1-2.5 per cent. Following the development, the share price of the IT giant tumbled to more than 2 per cent to Rs 1,429.55 on Friday on the National Stock Exchange (NSE).
The guidance cut came as a surprise to investors because the IT company had previously decreased its growth outlook substantially in the Q1FY24, revising it down from an initial forecast of 4-7 per cent to 1-3.5 per cent.
After reporting its July-September earnings and presenting a bleak growth outlook, the American Depository Receipts (ADRs) of the firm listed on the New York Stock Exchange also witnessed a significant decline.
Despite the Indian IT sector facing uncertainty, Infosys managed to achieve a robust performance in the July-September quarter, reporting positive financial outcomes. Coupled with a depreciated rupee and the postponement of salary hikes, it resulted in a 40-basis point increase in its EBIT margin for the second quarter on a sequential basis. Keeping in view the same, investors found it challenging to come to terms with the company's decision to lower its growth projections. The IT firm was even able to deliver strong wins in corporate deals. By the end of the second quarter of this fiscal year, the firm was able to clock deals worth $7.7 Billion.
While this is not the first time Infosys has faced a sharp decline in its stock prices. In the last quarter as well, the firm experienced selling pressure from the investors. Earlier this week, TCS had to face a similar trajectory in investor behavior.