IT major Infosys on Monday turned out to be the biggest loser among Nifty 50 constituents, as the company’s March quarter earnings failed to cheer investors. The stock closed at ₹726.65 on the BSE, down 2.83 per cent. Intra-day, it dropped to ₹713.70.

Analysts remain cautions on Infosys after its quarterly and FY results, which, according to them, are a mixed show.

Infosys, after market hours on Friday, announced a 10.5 per cent rise y-o-y in consolidated net profit at ₹4,078 crore. The company’s revenue increased 19.1 per cent to ₹21,539 crore. Besides, Infosys said it expects its topline to grow 7.5-9.5 per cent in 2019-20 in constant currency terms and operating margin in the range of 21-23 per cent.

According to Prabhudas Lilladher, Infosys reported in-line Q4 revenue performance but sharp miss on margins due to large deal impact and investments on people. Though “we are confident about Salil Parekh’s leadership and execution, we are cautious about margin expansion due to headwinds such as higher compensation, continued investments and impact on margin due to transition and ramp-up of recently won deals,” the brokerage firm, which revised its price target to ₹782 from ₹808 earlier, added.

Reliance Securities, which downgraded Infosys to ‘Hold’ from ‘Buy’, said: “FY20 margin will hit its lowest-ever level, and is likely to be about 400 bps below the five-year ago level and over 800 bps lower than the 10-year ago level. While we have consistently maintained our view of ‘good revenue growth but at a cost’, lower-than-expected outlook comes as a negative surprise.”

“Persistently higher attrition rate could also eat away profitability on higher employee retention cost,” it added.

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