Infosys shares down over 4% on concerns over outlook
Shares of Infosys fell by over 4 percent Thursday, wiping out Rs 12,138 crore from its market valuation amid concerns related to outlook after its chief operating officer said challenges in retail, energy and insurance sectors could result in 'quarterly bumps' for the firm.
Mumbai: Shares of Infosys fell by over 4 percent Thursday, wiping out Rs 12,138 crore from its market valuation amid concerns related to outlook after its chief operating officer said challenges in retail, energy and insurance sectors could result in 'quarterly bumps' for the firm.
The bluechip stock went down 4.27 percent to settle at Rs 1,185.45 on BSE. During the day, it plunged 4.61 percent to Rs 1,181.10.
The stock was the worst performer among the 30-Sensex components.
On NSE, it slipped 4.24 percent to close at Rs 1,185.50.
Following the decline in the stock, the company's market valuation plunged Rs 12,138.69 crore to Rs 2,72,291.31 crore.
On the volume front, 4.96 lakh shares of the company were traded at BSE and over 63 lakh shares changed hands at NSE during the day.
Decline in the stock was also significant in dragging down the Sensex by 257.20 points to 26,763.46.
"Shares of IT major Infosys slipped by more than 4 percent on the bourses after the company guided for 200 basis points cut in its guidance for June quarter margins. The cut in margin is due to the rising visa and salary costs, according to the company," Bonanza Portfolio, Head: Wealth Management and Financial Planning Achin Goel said.
Speaking at the Citi India Investor Conference, Infosys COO U B Pravin Rao said the company would face volatility over the next few quarters, due to weaker spending from these sectors.
However, the Bengaluru-based company was still on track to meet its full-year constant currency revenue guidance of 11.5-13.5 percent.
"We still remain confident of (our guidance of) 11.5-13.5 percent. But at the same time, given the volatile nature of our business, given the propensity of our clients to react immediately to some of the volatility, we will expect some short-term or quarterly bumps and ups and downs, but for the year, we remain confident," he said.
"In the last couple of weeks, we have seen results from retail in both the US and Europe have not been good ? it is been probably the poorest that we have seen in recent times. At this stage we don't know how retailers will react. At the beginning of the year... We were optimistic ? now we are a little bit watchful on the retail space," Rao said.
He added the company continues to see challenges in the short-term in the insurance space.