IT major Infosys’ shares tumbled 8 per cent in early trade on Friday as the company slashed its FY24 revenue guidance citing challenging macroeconomic environment. The company's net profit for the April-June quarter (Q1) also missed the Street's expectation, which also triggered weak sentiment. The IT services firm on Thursday logged a lower-than-expected 11 per cent rise in net profit for the June quarter and delivered a shocker as it slashed its FY24 growth outlook to 1-3.5 per cent on delayed decision-making by clients amid global macro uncertainties.
The company's net profit came in at Rs 5,945 crore for the quarter ended June 2023 compared to Rs 5,362 crore in the year-ago period. It posted revenue growth of 10 per cent to Rs 37,933 crore during the just-ended quarter.
Infosys, which competes with the likes of TCS, Wipro and others, drastically lowered its revenue guidance for the full year to 1 to 3.5 per cent in constant currency, down from 4 to 7 per cent it had projected earlier. The weak outlook and Q1 scorecard, which reflected microeconomic headwinds and delayed decision-making by clients, drove its US-listed shares down nearly 7 per cent in pre-market trading.
Seen sequentially, its net profit declined 3 per cent over the March quarter, while the revenue rose 1.31 per cent. "We had good Q1 with large mega deals, but we have seen some of the deal signing and start dates being delayed," Infosys CEO Salil Parekh said during an earnings briefing.
At 10.30 am, Infosys shares were trading at Rs 1,335.95 apiece, down 7.79 per cent on the BSE on Friday. The BSE Sensex was down 542 points to 67,029. On the other hand, the NSE Nifty50 tumbled 140 points to 19,840.
The sharp cut in infosys’s revenue guidance did not sit well with investors. A reflection of the dented sentiment was also seen in the 8.4 percent slide in the ADRs (American Depository Receipts) of Infosys on NASDAQ on July 20, after the company's results were announced.