file. , Photo Credit: Reuters
Shares of Infosys Ltd fell nearly 15% on April 17, underperforming peers and benchmark indices. Disappointing revenue outlook of the company Raised concerns about demand for Indian IT services amid global banking turmoil and recession fears.
Infosys’ outlook follows a dismal quarterly report from bigger rival Tata Consultancy Services last week, highlighting concerns for the sector, which only gets over 25% of its revenue from the US and European banking, financial, services and insurance sector. earns more.
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The collapse of two mid-sized US lenders in March shook the financial ecosystem and prompted an extraordinary government effort to reassure depositors and backstop the system.
Apoorva Prasad, Vice President, Institutional Research, HDFC Securities, said, “Some of the macro challenges, especially around banking, financial services and insurance (BFSI) have loomed large and this could mean project cancellations or delays in the deal decision cycle.” delay.”
Prasad said he was expecting sequential downgrades for companies such as HCLTech, Wipro and Tech Mahindra on a constant currency basis.
Infosys, India’s second largest IT services firm, on Thursday said it expects revenue growth of 4%-7% on a constant currency basis for the fiscal year ending March 2024, beating analysts’ 10.7% growth. Much lower than expected, as customers canceled. Some projects and deferred spending on growing fears of a recession.
The previous slowest annual growth was 5.8% growth in FY2018.
Infosys fell 14.7% to Rs 1,185.3 on Monday in its biggest intraday percentage loss since October 2019. The Nifty IT index fell up to 7.6%.
Infosys was the biggest drag on both the benchmark indices Sensex and Nifty.
The market valuation of the company also declined by Rs 73,060.65 crore to Rs 5,08,219.35 crore.
Other IT firms also suffered heavy losses, with Tech Mahindra, HCL Technologies, Tata Consultancy Services and Wipro falling 3-6% each.
Bengaluru-based Infosys’ net profit of ₹61.28 billion ($748.21 million) in the January-March quarter also missed analysts’ estimates of ₹66.24 billion, according to Refinitiv IBES.
Smaller rival HCLTech is due to report results later this week, while Wipro is expected next week.