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Tuesday, July 17, 2018

Infosys shocker rips 300 pts off Sensex; scrip dips 21.3%

* Firm's market value falls by Rs 34,848 cr after weak sales growth forecast

Written by ENS Economic Bureau | Mumbai | Published: April 13, 2013 2:17:27 am

Infosys shares plunged the most in 10 years and the market value of the company fell by a whopping Rs 34,848 crore on Friday after the tech blue chip forecast weak annual sales growth in spite of “firming economic indicators globally”.

Ignoring fall in retail inflation and better-than-expected industrial growth,the BSE Sensex fell nearly 300 points 18,242.56 as Infosys crashed by 21.33 per cent due to disappointing results and a weak guidance for this fiscal. Among the sectoral indices,S&P BSE-IT dropped the most by 11.09 per cent followed by S&P BSE-Teck 8.87 per cent.

Partha Iyengar,country manager — Research,Gartner India,said,“Infosys shows continued signs of stress in their overall performance and traction in their new business direction. Continued weak guidance,even in the context of firming economic indicators globally and especially in the key US market,is a significant cause of concern.”

“Infosys’ fourth quarter results came as a shocker in the context of high expectations. The lack of confidence and unwillingness to comment on a likely range for margins is shocking,” said Harit Shah,senior research analyst,Nirmal Bang. Analysts said the lower-than-expected results and the FY’14 guidance reflects the uncertain macro environment and the pricing pressure which the firm is experiencing.

Dipen Shah,head,Private Client Group Research,Kotak Securities,said,“Infosys’ results were below our expectations. The company has also missed the FY’13 revenue guidance. Moreover,the wide range of FY’14 revenue guidance took us by surprise. It is much below the Nasscom guidance for FY’14. The company has not provided the EPS (earnings per share) guidance.”

Among other IT stocks,TCS fell by 1.63 per cent and Wipro by 4.72 per cent on the Bombay Stock Exchange.

“The lack of stronger revenue growth despite the pressure on realisations in the non-discretionary space,is a cause for concern,” said Shah.

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