US-listed shares of Infosys plunged as much as seven percent in the opening trade on Thursday (October 12), after the company lowered its full-year revenue forecast for the second time in a row. The fall in American Depository Receipts (ADRs) indicates the stock may have a weak opening in tomorrow’s trade.

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However, the IT bellwether maintained its operating margin guidance at 20-22 percent for the financial year 2024. Retaining margins even after cutting the revenue guidance suggests a weak second half for the company and could seek cost cutting measures going forward.

“Discretionary and large transformation programmes have slowed significantly,” said Chief Executive Officer (CEO), Salil Parekh, at a press conference. He further added, the company is seeing tremendous focus on cost efficiency and automation, where it has an advantage and is winning mega deals.

While the stock of Infosys had plummeted 8.1 percent post first quarter results, the fall was much sharper in April. Shares of the company were hammered nearly 15 percent on April 17, before settling at Rs 1,258.30, down 9.4 percent on the NSE.

In fact, Infosys, the county’s second-largest software services exporter, had been narrowing its sales forecast ever since the beginning of the financial year. In April this year, the company had projected a revenue growth of 4-7 percent for the fiscal 2024, which was trimmed to 1 -3.5 percent in July and a further 100 bps (basis points) cut in the upper band to 2.5 percent now.

The company’s revenue in constant currency terms grew 2.3 percent in three months ended September, compared to a CNBC-TV18 poll expectations of 0.9 – 1 percent. Further, the company had reported a constant currency revenue growth of 1% during the June quarter.

Shares of Infosys have declined nearly three percent so far in 2023, against 9.3 percent gains clocked by the benchmark Nifty50 during the same period.

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(Edited by : Sangam Singh)

First Published:Oct 12, 2023 10:37 PM IST