Infosys shares plunged over 10 per cent in early trading on Friday after India’s second-largest tech company announced its June quarter results on Thursday.
Infosys shares opened at Rs 1,321 on the Bombay Stock Exchange (BSE), and hit an intraday low of Rs 1,311.60, down 10.40 per cent from its previous close of Rs 1,448.85
Infosys shares plunged over 10 per cent in early trading on Friday after India’s second-largest tech company announced its June quarter results on Thursday.
The stock opened at Rs 1,321 on the Bombay Stock Exchange (BSE), and hit an intraday low of Rs 1,311.60, down 10.40 per cent from its previous close of Rs 1,448.85.
At 10:20 AM, Infosys shares were trading 7.48 per cent down at Rs 1,341.50. The BSE benchmark Sensex was trading 610.24 points or 0.90 per cent lower at 66,961.66, and the broader NSE Nifty50 was down 103 points or 0.52 per cent at 19,876.15.
On Thursday, Infosys reported that its April-June quarter net profit came in lower-than-expected, as it surged 11 per cent to Rs 5,945 crore. The IT major also slashed its FY24 growth outlook to 1–3.5 per cent on delayed decision-making by clients amid global macro uncertainties. Infosys slashed its revenue guidance for the financial year to 1-3.5 per cent in constant currency, down from 4-7 per cent it had projected earlier.
"We had good Q1 with large mega deals, but we have seen some of the deal signing and start dates being delayed," Infosys CEO Salil Parekh said.
Infosys recorded revenue growth of 10 per cent to Rs 37,933 crore in first quarter.
After the disappointing guidance call by Infosys after its quarterly results, the stock price on the New York Stock Exchange (NYSE) slumped by 8.41 per cent and settled at $16.22 per share.
"While the guidance cut is concerning and should be negative for the share price in the short term (partially due to the 11% gain in the last month), we view the miss as more of a perception issue than an operational one as the earlier guidance was too optimistic in the current environment," Motilal Oswal Securities said in its earnings review.
"We lower our below-guidance FY24 estimates (earlier at 3.8 per cent YoY CC) by 120 basis points (bps) despite the 325 bps cut in guidance at the mid-point, to take into account the weaker demand commentary and project delays. We take comfort in the current 1Q-4QE revenue growth run rate estimate for Infosys, which is similar to its peers, despite lower FY24E revenue growth of 2.6 per cent YoY CC," the brokerage added.
It has maintained a "Buy" call on the stock with a target price of Rs 1,600. On the contrary, IDBI Capital has downgraded the stock to Hold from Buy with a target price of Rs 1,440.