Infosys shares have been under pressure since the markets opened on Friday morning with the shares hitting an intraday low of ₹1,305 per piece. The markets saw a dip of around 10 per cent within a few minutes of stock markets opening but gained a little to hit ₹1,338.80 at 9:41 am IST.
On the other hand the shares of Infosys on the New York Stock Exchange tanked close to 8.41 per cent and closed at $16.22 per share.
Infosys cuts down revenue growth guidance to 1-3.5%
Stock market experts were expecting a fall in shares after Infosys cut down its revenue growth guidance from 4-7 per cent to 1-3.5 per cent indicating tough times ahead.
While speaking to the press Salil Parekh the Chief Executive Officer said that the company has reported large and mega deals in the first quarter of this financial year and they are seeing signing and start dates being pushed.
He went on to say, "With that, we see a lot of that revenue from large and mega deals towards the later part of the financial year. Through the quarter we've seen volumes in some of our clients in the industries where they are reducing transformation projects or slowing down decision making."
According to Parkeh it was the combination of both that has led to the guidance being lowered depending on the macro environment.
Further in the meeting with analysts, Chief Financial Officer Nilanjan Roy said this decline in guidance was due to lower-than-expected volumes and lower mega deals in discretionary areas.
In addition to this Parekh said that the clients particularly in the financial services in asset management, mortgages, payments and investment banking are stopping or slowing down transformation programs and discretionary works in the short term. He also added, "We also see some impacts in the hi-tech industry and in parts of retail."
Infosys on Thursday reported 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 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. The company posted revenue growth of 10 per cent to Rs 37,933 crore during the just-ended quarter.
Seen sequentially, its net profit declined 3 per cent over the March quarter, while the revenue rose 1.31 per cent.
Infosys AI Capabilities
"When we look at volumes of discretionary projects, we see some of them slowing down. We see good traction from generative AI and mega deals," Parekh said.
In the Q1 results statement, Parekh said that the company had clocked solid Q1 with large deals of USD 2.3 billion, "which helps us to set a strong foundation for future growth".
"Our generative AI capabilities are expanding well, with 80 active client projects," he said.
Infosys Recruitment Plans
On the company's recruitment plans, Parekh said that while the company has targets for recruiting for the year, it will keep an eye on "changes in terms of the demand environment" and "attrition numbers".
On promotions, the company management said that compensations are under active consideration.
Large deal Total Contract Value (TCV) for the quarter was USD 2.3 billion.
The Bengaluru-headquartered company lost nearly 7,000 employees and its headcount was reduced to 3,36,294. Attrition (last twelve months) eased to 17.3 per cent from 20.9 per cent in the March quarter and 28.4 per cent in the year-ago period.