BENGALURU, April 17 (Reuters) – Shares of Infosys Ltd ( INFY.NS ) tumbled nearly 15% on Monday, dragging peers and the benchmark index, after the company’s dismal earnings raised concerns about the demand for Indian IT services amid the global banking crisis. and recession fears.
Infosys’ outlook last week followed a disappointing quarterly report from bigger rival Tata Consultancy Services Ltd ( TCS.NS ), which highlighted concerns for the sector that generates more than 25% of its revenue. from the US and European banking, financial, services and insurance sectors .
The collapse of two mid-sized US lenders in March slowed the financial ecosystem, and prompted an extraordinary government effort to reassure depositors and backstop the system.
“Some of the big challenges, especially around banking, financial services and insurance (BFSI) have become bigger and that means project cancellations or delays in the deal decision cycle,” said Apurva Prasad , vice president of institutional research, HDFC Securities.
Prasad said he expects sequential declines for companies such as HCLTech Ltd ( HCLT.NS ), Wipro Ltd ( WIPR.NS ) and Tech Mahindra Ltd ( TEML.NS ) on a constant currency basis.
Infosys, India’s second-largest IT services company, on Thursday said it expects revenue growth of 4%-7% on a constant currency basis for the year ending March 2024, below analysts’ expectations. of 10.7%, as clients canceled projects and postponed them. spending amid growing recession fears.
The previous slowest annual growth was a 5.8% increase in fiscal 2018.
Infosys shares fell 14.7% to 1,185.3 rupees in their biggest intraday percentage drop since October 2019. The Nifty 50 (.NSEI) fell as much as 1.4%, and the IT index (.NIFTYIT) fell more than 7 %.
The Bengaluru-based company’s net income of 61.28 billion rupees ($748.21 million) in the January-March quarter also missed analysts’ expectations of 66.24 billion rupees, according to Refinitiv IBES.
Smaller rival HCLTech is due to report results later this week, while Wipro is expected next week.
($1 = 81.9020 Indian rupees)
Reporting by Nishit Navin; editing by Eileen Soreng
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