Infosys down 4% on revenue guidance cut; mcap falls by Rs 10,416 crore

Mumbai: Shares of software services major Infosys fell by almost 4 percent, wiping out Rs 10,416 crore from its market valuation after the company on Monday cut its dollar revenue guidance for the current fiscal.

Despite positive opening and the stock hitting a one-year high of Rs 1,219, shares slipped into the red and ended with a loss of 3.88 percent at Rs 1,122.50 on the BSE.

During the day, it had tumbled 5 percent to Rs 1,108.90.

On the NSE, the stock dipped 3.81 percent to Rs 1,122.90 at close of trade.

The company's market valuation was down Rs 10,415.96 crore, to Rs 2,57,832.04 crore.

On volume front, 12.71 lakh shares of Infosys changed hands on the BSE and over 1 crore shares were traded at the NSE during the day.

The stock was the worst performer among the blue-chips on both Sensex and Nifty.

"Infosys Q2 results are quite impressive. Slashing the full year dollar revenue guidance is reflection of management's realistic market expectation. The dip in the stock price is perhaps an over reaction to the cut in revenue guidance and profit-booking to a certain extent," said Nithin Kamath, Founder & CEO, brokerage firm Zerodha.

Infosys, India's second-biggest software exporter, reported a 9.8 percent rise in September quarter consolidated net profit today but trimmed its dollar sales growth forecast for the current fiscal on dollar woes.

The company also said its Chief Financial Officer Rajiv Bansal has resigned.

Consolidated net profit in July-September rose to Rs 3,398 crore compared with Rs 3,096 crore in the year-ago period, the company said in a statement.

Revenue was up 17.2 percent to Rs 15,635 crore in the second quarter ending September 30 from Rs 13,342 crore in the year-ago period.

For the full fiscal, Infosys said revenue in dollar terms is likely to grow 6.4 percent to 8.4 percent, lower than previous guidance of 7.2 to 9.2 percent, as broad weakness in IT spending and a stronger dollar are making clients wary.

While the company did not give reasons for the cut in growth forecast, the appreciation of the dollar against major currencies is said to be the main cause.

"Though the company posted better-than-expected numbers but factors like lower revenue guidance in dollar terms, CFO resignation and dip in volume growth, dented the sentiments and triggered profit taking," said Jayant Manglik, President, Retail Distribution, Religare Securities.

Weakness was also seen in other IT stocks, with TCS falling 1.42 percent and Wipro, 1.02 percent. The IT index was down 2.08 percent to settle at 11,280.57.

Overall, the BSE index Sensex ended 175.40 points down at 26,904.11.