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Infosys Q1 Results: Infosys Shares Fall Sharply, PAT Rises 11 per cent

  • Posted on July 21, 2023
  • News
  • By Kanupreet Kaur
  • 1018 Views
Infosys

In a dramatic turn of events, Infosys, one of India’s leading IT services companies, witnessed a significant decline in its share prices following the release of its Q1 financial results. The market was taken by surprise as the company’s earnings failed to meet the high expectations set by investors and analysts.

As a result, Infosys shares experienced a sharp plummet, causing concerns among shareholders and market participants.

Infosys
Infosys Q1 Results: PAT rises 11% YoY to Rs 5,945 cr; firm sharply trims FY24 revenue growth guidance

Q1 Earnings Disappoint Investors

Infosys reported its Q1 earnings, showcasing revenue and profit figures that fell short of market projections. Despite overall growth in the IT sector during the period, Infosys struggled to meet the elevated forecasts, leading to a 12% decline in its share value intraday trading. This decline marked the biggest single-day loss for the company in the past three years.

Brokerages Express Concerns

In the aftermath of the disappointing earnings report, several leading brokerages have shared their views on Infosys’s performance and its impact on the stock market.

1.     Goldman Sachs:  The renowned global investment bank downgraded Infosys shares from “Buy” to “Neutral” and lowered the target price. In its research note, Goldman Sachs cited concerns over the company’s ability to sustain its growth momentum in the increasingly competitive IT services sector.

 

2.     Morgan Stanley: Another major financial institution, Morgan Stanley, expressed cautiousness over Infosys’s near-term prospects. The brokerage firm emphasized that while the long-term fundamentals of the company remain strong, short-term headwinds may weigh on the stock price.

 

3.     JP Morgan: JP Morgan acknowledged the Q1 results were below expectations but maintained its “Overweight” rating on Infosys. The brokerage highlighted the company’s robust client base and steady deal pipeline as factors that could support a recovery in the coming quarters.

 

4.     Credit Suisse: Credit Suisse, in its report, emphasized that the recent share price decline has created a potential buying opportunity for long-term investors. The brokerage believes Infosys’s strong balance sheet and diversified service offerings could help it weather the current market challenges.

A number of brokerage companies have downgraded Infosys as a result of its poor Q1 earnings and its revised FY24 outlook, while a few have kept their ratings.
Taking note of the uncertain global environment, the software major sharply cut its FY24 revenue growth estimate. Infosys now sees revenue growing just 1-3.5% in constant currency terms, against 4-7% earlier.

Market Sentiment and Future Outlook

The disappointing Q1 results and subsequent share price decline have raised concerns among investors, leading to increased market volatility. Many analysts predict that the uncertainty surrounding the global economic recovery and the ongoing pandemic could continue to impact IT companies’ performance in the short term.

 Investor Caution Advised

Given the current market volatility and the uncertainties that lie ahead, financial advisors are advising investors to exercise caution and carefully evaluate their investment decisions. While the technology sector has shown resilience during the pandemic, individual companies’ performance can vary significantly, as demonstrated by Infosys’s recent setback.

As with any investment, diversification and a long-term perspective are essential to mitigate risks and achieve sustainable returns. Investors are encouraged to seek professional advice and conduct thorough research before making any investment decisions in the current market environment.


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Kanupreet Kaur

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