The shares of India's largest IT services provider Infosys crashed more than 11 percent on Monday after its fourth quarterly reports missed street estimates.
The Bengaluru-based IT firm reported an 8 percent growth in its net profit at Rs. 6128 crores, while revenue from operations jumped 16 percent to Rs. 37441 crores. Both the figures were below the forecasts.
Infosys announced its Q4 results after market hours on Thursday. Indian equity markets were closed for trading on Friday for Ambedkar Jayanti.
Infosys Q4 results -
The net profit in the March quarter fell by 7 percent, while sales decreased by nearly 2.3 percent.
Infosys' operating margin contracted by 50 basis points sequentially to 21 percent.
The company bagged TCV (Total Contract Value) deals worth 2.1 billion USD, while for the financial year 2023, the total deal wins were worth 9.8 billion USD.
The board has approved a final dividend of Rs. 17.50 per share for the FY ended March 2023.
The company has guided FY24 sales to grow by a mere 4-7 percent in constant currency terms, which highlights the challenges it oversees for business in the current year. The operating margin is expected to be in the range of 20-22%.
"As the environment has changed, we see strong interest from our clients for efficiency, cost, and consolidation opportunities, resulting in a strong large deal pipeline," said Salil Parekh, MD, and CEO at Infosys.
"We have expanded our internal program on efficiency and cost to build a path to higher margins in the medium term. We continue to invest in our people and in supporting our clients," Parekh added.
Despite the weak Q4 earnings of the company, many top brokerages have recommended a "BUY" call for Infosys' shares.
Key risks include weaker revenue growth, lower margin, unfavorable currency, and corporate action, the brokerages said.
