Shares of Infosys opened at a 52-week low on Monday, dropping the most in over three years, after analysts tracking Infosys have either downgraded or cut their price targets on the stock, or done both after the company's March quarter earnings shocked the street.

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US-listed shares of Infosys ended 10 percent lower on Thursday and another 1.5 percent on Friday when Indian equities were shut due to a holiday. Infosys has a 6.6 percent weightage on the Nifty 50.

Infosys announced its earnings for the quarter that ended March 2023 on Thursday. The company expects revenue in the financial year 2024 to grow between 4-7 percent, against the street expectation of 6-8 percent on a constant currency basis. It is the second major IT company, after TCS, to report its March quarter results.

In an interview with CNBC-TV18, Sumeet Jain, IT Analyst at ICICI Securities said, “From a one-year perspective, we would definitely like to recommend investors to add into today’s correction.”

Meanwhile, Moshe Katri, MD at Wedbush Securities said, “The earnings miss for both TCS and Infosys were predominantly a function of utilisation rates. People sitting on a bench towards the end of the quarter, and this could be adjusted quickly if these companies want to preserve margins.”

Also Read | Nifty IT facing an angry backlash over TCS, Infosys missing street estimates

However, Manishi Raychaudhuri, Asian Equity Strategist, Equity Cash Asia Pacific at BNP Paribas said, “If someone has a short-term outlook on the Indian market (equity) then it is possibly better to stay underweight on the sector, but if one has 2-3 year timeframe then I would think of focusing on the large frontline IT service companies. But one must keep in mind that the near-term might continue to be wobbly.”

While talking about the sector, market expert Prakash Diwan said, “My sense is IT will probably reset itself in another six months, in terms of what kind of projects, what kind of businesses start doing well, the midsize players could probably start being more promising and that is more domestic-oriented. But at this point, Info Edge does lose its lustre of sorts given what's happening to the large IT names.”

Also Read | Infosys going slow on hiring, attrition down: CEO Salil Parekh

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(Edited by : Anshul)

First Published:Apr 17, 2023 12:03 PM IST