Infosys Shares Decline: Infosys, a major Indian IT company, saw its American Depositary Receipts (ADR) shares on the New York Stock Exchange drop by approximately 7 percent following the announcement of its September quarter results. As a result, when the Indian stock market opens on Friday, pressure may be felt on Infosys shares.
Infosys reported quarterly results that exceeded market expectations, but the company has reduced its revenue growth targets for the current financial year. The stock price of Infosys on Thursday declined by 2 percent, closing at INR 1,464.55.
Prashant Tapse, Senior Vice President of Mehta Equities, explained, “The company’s downward revision of revenue guidance is having a negative impact on its shares. Overall, the results are not as bad as they may seem. The company has maintained its margin target, but the change in revenue growth has put pressure on stock prices. From a technical perspective, the late decline in the company’s shares on Thursday does not suggest a rapid decline in results. As a result, when the stock market opens on Friday, Infosys shares may open in the range of INR 1,400-1,420.”
Infosys had previously lowered its revenue guidance for the current financial year to a range between 1 to 2.5 percent following the announcement of its September quarter results. Earlier, at the end of the June quarter, the company had reduced its revenue guidance more significantly to a range of 1 to 3.5 percent. Prior to these adjustments, the company’s revenue guidance was in the range of 3 to 7 percent.
Sumit Pokharna, Vice President (Research Analyst) at Kotak Securities, believes that Infosys’ quarterly results have been quite positive. He stated that the company has recorded a 2.3 percent revenue growth rate in constant currency terms on a quarterly basis, along with an EBIT margin increase of 0.40 percent, which is impressive.
Pokharna added, “The company’s net profit figure is also good, and the value of its large deals has reached $7.7 billion. However, the downward revision in revenue guidance has somewhat dampened the mood. A reduction in revenue guidance from the upper end implies that the company may witness a 1.9 percent decrease in its revenues in the next two quarters.”
In summary, Infosys’ quarterly results have elicited mixed responses in the market, with the company delivering strong numbers but facing concerns over its revenue guidance for the coming quarters. This has resulted in uncertainty and may influence the behavior of Infosys shares in the Indian stock market.