Infosys shares fall 15% after disappointing Q4 report; mcap down by Rs 73k Cr

Infosys shares tumbled nearly 15% in Monday’s (April 17) morning trade after the company reported lower-than-expected growth in the fourth-quarter net profit. Around Rs 73,060.65 crore got wiped out from its market valuation after it gave a weak 4–7% revenue growth guidance for FY24 last week.

The Infosys stock tumbled 12.21% to Rs 1,219 — its 52-week low — on the BSE. At the NSE, it fell 14.67% to its 52-week low of Rs 1,185.30. Infosys was the biggest drag on both the benchmark indices Sensex and Nifty.

Also read: Infosys Q4 net profit rises 7.8% to Rs 6,128 crore

The company’s market valuation also declined by Rs 73,060.65 crore to Rs 5,08,219.35 crore. The 30-share BSE Sensex quoted 891.04 points or 1.47% lower at 59,539.96 in morning trade, pulled down by Infosys and weak trends in other IT counters.

Other IT firms also faced heavy drubbing, with Tech Mahindra, HCL Technologies, Tata Consultancy Services (TCS), and Wipro falling in the range of 3–6%.

Disappointment on several fronts

“The worse-than-expected Q4 results from Infosys, with only 4–7% revenue growth for FY24, will drag down IT stocks impacting the Nifty,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Infosys on Thursday (April 13) reported lower-than-expected growth in the fourth-quarter net profit and gave a weak 4–7% revenue growth guidance for FY24 amid the tightening of IT budgets by clients following a turmoil in the US banking sector.

Also read: Buzz over widening trade deficit, Infosys growth and Apple output in India

Infosys’s latest report card was a disappointment on several fronts — the company missed revenue guidance for FY23 hit by “unplanned project ramp downs and decision-making delays by some clients,” the company said.

With global macroeconomic uncertainties looming, it has given a subdued 4–7% revenue growth forecast for FY24, with top management cautioning that “the environment remains uncertain”.

Infosys had last given single-digit revenue guidance in FY19.

Q-on-Q profit fell 7%

India’s second-biggest software services firm posted 7.8% year-on-year growth in consolidated net profit at Rs 6,128 crore for the March quarter. But the profit fell 7% compared to the preceding December quarter.

Also read: Infosys lays off 600 freshers who failed internal exams: Report

The revenue growth in constant currency for FY23 came in at 15.4%, lower than the guidance. Notably, during the Q3 earnings announcement in January this year, Infosys — which competes in the market with TCS, Wipro, and other IT firms — had raised FY23 revenue guidance to 16–16.5% (against the previously projected band of 15–16%).

Infosys’ Q4 year-on-year-growth was 8.8%, and the sequential decline was 3.2% in constant currency terms. Revenue rose 16% year-on-year in the fourth quarter of FY23 to Rs 37,441 crore but represented a decline of 2.3% compared to the December 2022 quarter.

(With agency inputs)