The American Depository Receipts (ADRs) of Infosys tumbled 6.5% in overnight trade on the New York Stock Exchange (NYSE) on Thursday after the Bengaluru-headquartered IT major cut revenue guidance for the second in a row. The IT heavyweight expects its financial year 2023-24 revenue to grow between 1-2.5%, lower than the 1-3.5% growth projected in the June quarter results.
Weighed down by cut in revenue guidance, Infosys shares opened lower on Indian stock exchanges on Friday as investors digested the July-September earnings and a weak growth outlook. The IT stock opened lower for the third straight session at ₹1,419.95 on the BSE, down 3% against the previous closing price of ₹1,464.55. In the early trade, the counter dropped as much as 4.2% to ₹1,402.10, while the market capitalisation slipped to ₹5.95 lakh crore. In the last three sessions, Infosys share price has fallen over 6%.
At the day’s low level, Infosys shares trade 16% lower than its 52-week high of 1,672.45 touched on December 1, 2022. It hit a 52-week low of 1,215.45 on April 25, 2023. In the last one year, the counter has given a flat return of 1%, while it lost over 6% in the calendar year 2023. The stock has risen 3% in six months, whereas it shed 4.5% in a month.
Meanwhile, the BSE IT index was down by 0.8% with Infosys emerging as top loser. Among the sectoral leaders, HCL Tech and TCS were trading in green, while Wipro, Tech Mahindra were reeling under selling pressure.
HCL Technologies was the top performer in the IT space, with a 2.5% gain after the Noida-based company reported better than expected earnings.
In a post market release on Thursday, Infosys said it posted a net profit of ₹6,212 crore in the July-September quarter, up 3.32% from ₹6,021 crore in the same period last year. The consolidated revenue grew 6.7% to ₹38,994 crore against the revenue worth 36,538 crore reported during the year-ago period.
In dollar terms, Infosys clocked $4,718 million revenues in Q2 FY24, with year-on-year growth of 2.5% and sequential growth of 2.3% constant currency.
The Infosys board also announced an interim dividend of ₹18 per share, an increase of 9.1% over last year.
In its revenue guidance, the company lowered the growth projection for FY24 to 1-2.5%, while the guidance on operating margin was retained at 20-22%. In the previous quarter, the IT firm had trimmed its FY24 revenue guidance to 1-3.5% from 4-7% earlier.
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