Infosys slides 9% on poor March quarter earnings, other IT stocks follow suit
- Shares of Infosys plunged as much as 9% today on lower than expected March quarter earnings.
- Analysts have cut down company estimates as the profit margin of the company remains under pressure due to cost pressures led by higher employee costs and a rise in travel costs.
- As a result, shares of other information technology firms also fell today in an already weak market.
Stable deal wins and lower than the expected profit margin of the company due to cost pressures led by higher employee costs and rise in travel costs among concerns that impacted Infosys stock.
Infosys ADR stock, which trades on the US stock market, slipped 14% in previous 5 sessions because of weak earnings at a time when Indian markets were closed due to holidays.
“Infosys' 4Q (March quarter) results missed estimates mainly due to muted growth of 1.2% on quarter constant currency. However, its 13-15% revenue growth guidance for FY23 and all-time high net additions reflect a strong demand outlook,” said analysts at Jefferies.
After considering the seasonal weakness in the Jan-Mar quarter, Infosys result was still disappointing. “Infosys' growth in 4Q disappointed even considering the seasonal weakness. Muted growth in its top-2 verticals (BFSI and Retail) and top markets (North America and Europe) and a sharp decline in Life Sciences vertical possibly due to one-off contractual issues resulted in the subdued growth performance,” said a report by Jefferies.
Moreover, it expects the attrition rate to decline gradually as it also kicks off hikes from April 1.
The market capitalisation of the top company fell to ₹6.8 lakh crore from ₹7 lakh crore last week.
$INFY.NSE A major crack has been seen in INFY. Here are some ideas on what you should do! -> For Traders - 1650 Price zone was major support zone which has been broken now & for medium term the Trend has become bearish. Any rise to 1650 will be a clear Sell. -> For Investors - This is the Right time for Investors to kick in because $INFY is the Investors darlings and you must consider that it is available on discount. The management of the company is same, the product, the environment is the same & it is the best time to average out Infy & hold it for next few years! Here, what you can see is that Infy is Bearish on the medium term trend & amazing BUY for Investors as a Great company is available for Good prices!— (@Tradingmonks) April 18, 2022
Moreover, analysts expect the share price of the company to rise more as the demand outlook for the future remains strong. As of 11:27 p.m. shares of the company stand at ₹1,621 per share, down by 7.29%.
|Brokerage house||Target price|
SEE ALSO: Extreme Poverty in India declined 12% in the last decade, says World Bank
Exim Bank recruitment 2022: Checkout vacancies, eligibility criteria and other details
- Exploring India's majestic glaciers: 10 frozen wonders
- New fund alert: 'Axis India Manufacturing Fund'
- Anti-collision system KAVACH, Delhi-Kolkata, Delhi-Mumbai corridor to see completion in 2024-25: Vaishnaw
- Top 10 places to visit in India in December
- 10 Amazing health benefits of Aloe Vera