Infosys share price impact: Infosys shares are anticipated to experience substantial volatility in Tuesday’s trading session following the company’s loss of a multi-year contract valued at USD 1.5 billion. Analysts expect shares of Infosys to open in the red in tomorrow’s session.
In an exchange filing on December 23 (Saturday), the IT major announced that,” This is in continuation to the disclosure made by Infosys via a letter dated September 14, 2023, titled “Company Update” with respect to a Memorandum of Understanding with a global company which was subject to parties entering into a Master Agreement. The global company has now elected to terminate the Memorandum of Understanding, and the parties will not be pursuing the Master Agreement.”
The agreement between Infosys and the company was planned as a 15-year commitment, with the Memorandum of Understanding (MoU) signed on September 14, 2023.
“Infosys has entered into a Memorandum of Understanding with a global company to provide enhanced digital experiences, along with modernization and business operations services, leveraging Infosys platforms & AI solutions. The total client target spend over 15 years is estimated at USD 1.5 billion. This is subject to parties entering into a master agreement,” the company said in an exchange filing made in September.
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The termination of the deal comes less than two weeks after the company’s chief financial officer (CFO), Nilanjan Roy, suddenly resigned after holding the position for around six years. However, the deal loss indicates further pressure on Infosys and other IT companies in India to drift over the muted business over the past three to four quarters.
The UK economy, one of the significant markets for Indian IT companies, contracted in the third quarter, as per official estimates. Experts are warning that Britain may already be at risk of a recession.
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On December 5, the company announced that it had won a five-year deal from LKQ Europe, one of the leading distributors of automotive aftermarket parts for cars, commercial vans, and industrial vehicles in Europe. Its other recent large deals include a $1.64 billion deal with London-based Liberty Global for a five-year period.
The company is set to announce its Q3FY24 financial results on January 11 following a board of directors meeting commencing on January 10.
Disclaimer: We advise investors to check with certified experts before taking any investment decisions.
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Published: 25 Dec 2023, 05:37 PM IST