Infosys Shares Decline Over 4% on Q2 Earnings Report. Infosys witnessed a drop of more than 4 percent in its shares during early trading on Friday following the release of the second-quarter earnings report by the IT giant.
Around 10 a.m., Infosys shares were down by 2.90 percent, trading at Rs 1,423.15 on the National Stock Exchange (NSE).
In the report, Infosys recorded a 3.17 percent increase in net profit, reaching Rs 6,212 crore, as compared to Rs 6,012 crore in the same quarter of the previous year. The company’s consolidated revenue experienced a 6.7 percent year-on-year (YoY) growth, reaching Rs 38,994 crore.
In terms of US dollars, Infosys disclosed a 3.6 percent rise in revenue, reaching $4,718 million in Q2, as compared to $4,555 million in the previous September quarter. Sequentially, the revenue witnessed a 2.2 percent growth from $4,617 million.
The profit in US dollars for the company in the last quarter amounted to $751 million, showing a 0.3 percent increase as compared to $748 million in the September 2022 quarter.
Despite the second-quarter earnings of Infosys meeting the expectations of analysts, the shares of the company experienced a decline due to a weaker revenue guidance for the ongoing financial year.
Infosys revised its FY24 revenue guidance to a range of 1-2.5 percent in the last quarter, down from the previous FY24 revenue guidance of 1-3.5 percent, as projected in the June quarter. Nevertheless, Infosys retained its operating margin guidance at 20-22 percent.
Dhruv Mudaraddi, a Research Analyst at StoxBox, stated, “Infosys Ltd’s Q2FY24 results indicate a mixed performance, with revenue guidance for FY24 being revised to a range of 1.0 to 2.5 percent growth in constant currency, down from the previous 1.0 to 3.5 percent. This revision is attributed to lower volumes resulting from reduced discretionary spending and mega deal volumes owing to delays in project ramp-up.”
Choice Broking, a brokerage firm, highlighted Infosys’ cautious outlook for FY24 but also noted that the company’s strong order book could drive growth. Despite the drop in shares, the brokerage maintained a target price of Rs 1,655 for Infosys with an ‘add’ rating, suggesting potential upside.