BENGALURU (Reuters) – Shares of Infosys Ltd (INFY.NS) fell nearly 15 percent on Monday, dragging its peers and benchmark index, after the company’s dismal revenue outlook sparked concerns about demand for Indian IT services amid global banking turmoil. and recession fears.
Infosys’ outlook last week followed a disappointing quarterly report from bigger rival Tata Consultancy Services Ltd (TCS.NS), highlighting concerns for a sector that earns more than 25% of its revenue from the US and European banking, financial, services and insurance sectors. . .
The collapse of two mid-sized US lenders in March has shaken the financial ecosystem, prompting extraordinary government efforts to reassure depositors and shore up the system.
“Some of the macro challenges, particularly around BFSI, have become larger and that means project cancellations or delays in the deal decision cycle,” said Apoorva Prasad, Vice President, Institutional Research, HDFC Securities.
Prasad said he expects a consecutive decline for companies such as HCLTech Ltd (HCLT.NS), Wipro Ltd (WIPR.NS) and Tech Mahindra Ltd (TEML.NS) on a constant currency basis.
Infosys, India’s second-largest IT services company, said on Thursday it expects revenue growth of 4%-7% on a constant currency basis for the year ending March 2024, well below analysts’ forecasts of 10.7%, as clients cancel projects. and postpone it. Spending on growing fears of a recession.
The previous slowest annual growth was a 5.8% increase in fiscal 2018.
Shares of Infosys fell as much as 14.7% to 1,185.3 rupees in the biggest intraday percentage drop since October 2019. The Nifty 50 Index (.NSEI) fell as much as 1.4%, and the Information Technology Index (.NIFTYIT) fell more than 7%.
According to Refinitiv IBES, the Bengaluru-based company’s net profit, which came in at 61.28 billion rupees ($748.21 million) in the January-March quarter, fell short of analysts’ expectations at 66.24 billion rupees.
Smaller rival HCLTech is due to report results later this week, while Wipro is expected next week.
($1 = 81.9020 Indian rupees)
(Reporting by Neshet Navin). Editing by Eileen Soering
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