Infosys shares fell over 4 percent on Monday after the IT major reported a 2.2 percent year-on-year (YoY) drop in net profit at Rs 4,019 crore for the second quarter ended September 2019. The stock price fell as much as 4.2 percent to Rs 781 per share on the BSE. At 9:35 am, the stock was trading 3 percent lower at Rs 792, while the Sensex was down 0.08 percent or 32 points at 38,092.

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Infosys reported Q2 revenue of Rs 22,629 crore, a 9.8 percent increase when compared to Rs 20,609 crore in the same period last year. The company also declared an interim dividend of Rs 8 per share.

The company raised its FY20 growth guidance to 9-10 percent from 8.5-10 percent earlier. However, The EBIT margin guidance was maintained at 21.23 percent.

The firm registered a 3.3 percent QoQ and 11.4 percent YoY constant currency (CC) growth during the second quarter. CC growth in digital came at 38.4 percent YoY.

"Our performance was robust on multiple dimensions – revenue growth, digital growth, operating margins, operational efficiencies, large deal signings and reduction in attrition," Salil Parekh, CEO and MD said post Q2 earnings.

Meanwhile, brokerages remained cautious on the stock post the earnings. Credit Suisse has an 'underperform' call on the stock but raised its target to Rs 720 per share from Rs 690 earlier, while, Jefferies maintained a 'buy' call on the stock but cut its target to Rs 915 per share from Rs 930 earlier.

Smaller verticals like telecom, energy, and manufacturing saw double-digit growth YoY, said Credit Suisse, adding that it cut the firm's FY20-22 EPS estimates by 2-5 percent on higher-than-expected retail weakness.

According to Jefferies, the company remains one of the best-placed among top tier IT companies and added that it will benefit from the tailwind of large-scale digital transformation.

HSBC has a 'hold' rating on the stock with a target price at Rs 800 per share. Banking and retail demand trends show clear deceleration, said the brokerage adding that valuation gap to the company may go down further. Near-term earnings surprises are unlikely, HSBC noted.

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