The world of stocks is always volatile, and sometimes even the giants aren’t spared. This time, it’s Infosys that’s under the scanner. After announcing its quarterly results, the tech giant saw a drop in the value of its ADR shares listed on the New York Stock Exchange.
Infosys: The Initial Impact
- What Happened?
- Following the announcement of Infosys’s September quarter results, its ADR shares listed on the New York Stock Exchange saw a decline of about 7%.
- Anticipated Impact in India:
- Given the decline in the ADR shares, experts predict that Infosys shares in India might also experience pressure when the market opens on Friday.
- Positive Side of the Results:
- Contrary to the decline, Infosys’s quarterly results were better than market expectations.
The Main Concern:
- Revision of Revenue Growth Target:
- Infosys revised its revenue growth target for the current financial year, which has somewhat disappointed the market. This adjustment in revenue growth expectations is the primary reason behind the market’s slightly disheartened response.
Market Analysts Weigh In:
- Shares at a Glance:
- As of 10 PM IST, Infosys ADR shares were trading at a price of 16.41 dollars, marking a decline of 6.81%.
- Insights from Prashant Tapase, Senior Vice-President, Mehta Equities:
- “The company’s reduction in its revenue guidance is currently acting as a negative aspect for its shares,” Tapase highlighted. He further speculated that the stock might open between 1,400-1,420 rupees in the initial trade the next day.
- What’s Next?
- Infosys shares closed at a price of 1464.55 rupees before the announcement of the results, indicating the anticipation built around the results.
A Broader Perspective:
- Infosys’s Revenue Guidance:
- The company has now trimmed its revenue guidance to a range of 1% to 2.5% for the current financial year. Earlier, during the end of the June quarter, the guidance was adjusted from 3% to 7% to a range of 1% to 3.5%.
- Views of Sumit Pokharna, Vice President (Research Analyst) at Kotak Securities:
- “Infosys’s quarterly results are impressive. The company has registered a revenue growth of 2.3% on a quarterly basis in constant currency terms and has also seen a 0.40% increase in its EBIT margin,” commented Pokharna.
- The Mood in the Market:
- Despite the strong figures, the revised revenue guidance has slightly dampened the mood. The upper level of the guidance cut indicates that the company’s revenue might see a dip of up to 1.9% in the upcoming two quarters.
Conclusion:
In the vast sea of stock markets, even the most stable ships can face turbulent waters. Infosys, with its recent revenue guidance revision, is going through such a phase. However, with a robust business model and strategic planning, it remains to be seen how the tech giant navigates this situation in the forthcoming quarters.