The American Depository Receipts (ADRs) of IT heavyweight Infosys plunged nearly 10% in overnight trade on the New York Stock Exchange (NYSE) on Thursday as investors weighed the company’s lower-than-expected earnings in the March quarter. The market sentiment was further dented after the Bengaluru-headquartered IT major projected slower revenue growth for the fiscal year ending March 2024.
The U.S.-listed shares of Infosys plunged 9.78% to hit a low of $15.40 on NYSE, registering their biggest one-day selloff since December 2020. Weak trends were also witnessed in other IT counters, with Wipro ADR falling 3.1% to $4.36 on NYSE. Indian companies list their ADRs on American stock exchanges so that U.S. investors can buy their securities. These securities, which are offered in U.S. dollars, are negotiable certificates issued by a U.S. depositary bank, representing a specified number of shares of a foreign company’s stock.
Meanwhile, on the Bombay Stock Exchange (BSE), shares of Infosys closed 2.79% lower at ₹1,388.60 ahead of its Q4 earnings report. The weakness in Infosys shares were in line with BSE IT index, with all heavyweights like Tata Consultancy Services, Wipro, Tech Mahindra, HCL Tech, and LTIMindtree falling between 1-3% after IT bellwether TCS reported mixed earnings report for the March quarter.
Infosys reported 7.8% year-on-year (YoY) rise in consolidated net profit at ₹6,128 crore in Q4FY23, compared with ₹5,686 crore in the same quarter last year. On the quarter-on-quarter (QoQ) basis, the profit de-grew by 7% from ₹6,586 crore in the December quarter of 2022. Consolidated revenue from operations jumped 16% to ₹37,441 crore in Q4FY23, as against ₹32,276 crore in the corresponding quarter last fiscal. Sequentially, the revenue dropped 2.3% from ₹38,318 crore in Q3FY23.
Dollar revenue for the quarter stood at $4,554 million, up 6.4% from $4,280 million in Q4FY22. Sequentially, dollar revenue declined 2.2% from $4,659 million in Q3FY23. In constant currency (CC) terms, revenue grew by 8.8% YoY and dropped by 3.2% QoQ.
Segment wise, revenue from financial services sector, which contributes to 29% of the total revenue, declined 1.7% YoY. The communication vertical revenue dropped 2 percent YoY. The revenue from the manufacturing vertical, which accounts to 13.5% of total revenue, was the best performer with a 22% YoY growth, followed by energy, utilities, resources & services, which posted a growth of 14.3%. while the revenue from retail business grew 10% YoY, communication segment reported a decline of 2.1% YoY.
Going forward, Infosys expects revenue growth in CC terms at 4-7% for FY24. The EBIT margin for the fiscal has been projected to grow at 20-22%.
During the quarter under review, the company won orders worth $2.1 billion, taking its FY23 order wins to $9.8 billion.
The board of the company has also declared a dividend of ₹17.50 per share for the fiscal year FY23. It fixed June 2 as the record date to determine eligible shareholders for the dividend benefits, while the dividend will be paid on July 3, 2023.
