Infosys One Day Highest Fall In 52 Weeks

Infosys shares declined by approx. 11% in their biggest single day decline on Monday after company missed the profit estimates for fourth quarter.

The fall in Infosys’ stock price was not an isolated incident but was part of a broader decline in the Indian stock market, which had been under pressure due to concerns over rising inflation and global economic uncertainties. However, Infosys’ drop was significant as it was one of the largest contributors to the decline in the benchmark Nifty 50 index.

Despite the setback, Infosys’ management remained optimistic about the company’s long-term prospects, stating that it was confident of delivering on its growth and profitability targets. The company’s strong fundamentals, diversified business portfolio, and focus on digital transformation were seen as key factors that could help it weather the short-term challenges and emerge stronger in the long run.

About Infosys

Infosys is a large Indian IT services company, offering a range of digital and traditional IT services. The company counts itself among the largest and most respected global software firms. It’s known around the world for its quality management, work ethics and corporate governance standards. The major products and services provided by Infosys NIA, Infosys Consultancy, Cloud based enterprise, IIP, Panaya cloud site, Skava, Engineering Services and many others.

Reason Behind Such Decline

The company opened with a gap down on Monday and showed fall in price by around Rs 149 ( nearly 11%) after declaring its Q4 results FY23 on Thursday. Infosys declared a weaker than expected results with a decline on Quarter on quarter basis by 2.3%, and reported a revenue of Rs 37,441 crore with a net profit of Rs 6128 crore. One of the factors which affected the price was that the revenue of the company was impacted due to the impact of banking turmoil in major markets, especially USA and Europe. Collapse of SVB brought IT companies under trouble. The crisis had indirect impact on Tier 1 companies.

From the beginning of covid the stock price has continuously showed an upward movement because of growing phase of IT services. In March 2020, the price of the share was something around Rs 500 and continuous growth lead to increase in price of share to Rs 1950 as on January 2022.

After which there was high volatility in the price due to laying up off employees by tech companies which brought down the price to Rs 1350 approx. during September 2022, and again upward movement to Rs 1678 in the month of December. Lat few week there was not much growth in share price and after the gap up opening the price fell nearly about 11% which in biggest intraday percentage fall after 2019.

Outlook on Infosys Stock

Brokerage Firm JPMorgan has reduce its price target by 20% from Rs 1500 earlier to Rs 1200. JPMorgan has cut revenue estimates by 4-5% and margins estimates by 70 basis points due to it weaker results than expected for Financial year 2024-2025.

Also, CLSA has declined its rating on Infosys from Rs 1800 to Rs 1500. CLSA along with weaker result it found a weak and uninspiring management.

Another downgrade in price target from Citi due to weak communication sector for both TCS and Infosys. Citi has now given a neutral rating with price target from Rs 1675 to Rs 1400

Nomura has cut its price target by over 22% which is from Rs 1660 to Rs 1290.

Reliance securities has cut its price target by nearly 23%. The firm has downgraded the stock to sell from earlier rating to buy.