Bengaluru: Infosys Ltd shares slumped nearly 15% on Monday and dragged stocks of peers, after the IT services exporter’s dismal revenue outlook highlighted the impact of banking turmoil in major markets, the United States and Europe.
Infosys’ outlook followed a disappointing quarterly report from larger rival Tata Consultancy Services, highlighting worries for the sector which earns more than 25% of its revenue from just the U.S. and European banking, financial, services and insurance sector.
The collapse of two mid-sized U.S. lenders in March had left the financial ecosystem shaken and driven an extraordinary government effort to reassure depositors and backstop the system.
Infosys saw its biggest intraday percentage drop since October 2019, and dragged other IT stocks, with the Nifty IT index dropping as much as 7.6%.
India’s second-largest IT services firm on Thursday said it expects revenue growth of 4%-7% for the fiscal year ending March 2024, well below analysts’ expectations of 10.7% growth, as clients deferred spending due to growing fears of a recession. The previous slowest growth was a 5.8% increase in fiscal 2018.
“Given the uncertain environment in the near term, growth can be back ended for Infosys, in our view,” PhillipCapital said in a note.
The Bengaluru-based company’s net profit of 61.28 billion rupees ($748.21 million) in the January-March quarter also missed analysts’ expectations of 66.24 billion rupees, according to Refinitiv IBES.
(Reporting by Nishit Navin; editing by Eileen Soreng)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.
Also read: India’s Infosys forecasts slower FY24 revenue growth of 4%-7%