Weak revenue guidance pulls down Infosys share price by 7.7%
The share price performance of Infosys also had its bearings on technology companies’ scrips with TCS down by 2.58%, Wipro at 3.05% and HCL Technologies at 3.17% on the NSE.
The share price of declined by 7.73% on Friday in reaction to the downcast revenue guidance provided by the company for FY24, prompting several brokerage houses to call for a sell rating on the stock.
The Infosys stock ended at Rs 1337.45 on NSE as against Thursday’s close of Rs 1449.50. This sharp drop was in reaction to the company revising its revenue growth guidance to 1-3.5% for FY24 from the earlier projection of 4-7%.
This revised revenue guidance by Infosys came as a shock for the market which expected a more optimistic narrative from the company. According to Infosys CEO Salil Parekh, the lowered guidance was largely to its client base delaying its IT spending, especially on new projects. Further, the company expects signs of marginal recovery only towards the end of this current financial year.
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The below-par performance of Infosys for the first quarter also saw brokerage houses reducing their buy call on the stock. According to a report by Bloomberg, the number of buy calls by the brokerage houses on the stock before the results was 28 and it reduced to 21 post the results.
The share price performance of Infosys also had its bearings on technology companies’ scrips with TCS down by 2.58%, Wipro at 3.05% and HCL Technologies at 3.17% on the NSE. The Nifty IT index was down 4.09% even as the broader Nifty 50 dipped by 1.17%.
The recovery in the stock prices of Indian IT services companies will take longer than expected as the macroeconomic situation in its key markets like US and Europe seem to get into recessionary mode.
Edited by Akanksha Sarma