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Call it N.R. Narayana Murthy factor or value buying, insurance behemoth LIC bought 43.8 lakh shares of Infosys during April-June quarter, according to the latest shareholding pattern available with the exchanges.
The stock had slumped 21 per cent on April 12 (to a low of Rs 2,268), as the company’s current year guidance was much lower than the whole industry estimates.
Though the stock had recovered a part of the losses since then, it is still ruling far away from its 52-week high of Rs 3,010 that was registered on March 7.
LIC holds 6.7%
Following the purchase, LIC’s holding in Infosys at the end of June jumped to 6.72 per cent from 5.96 per cent (March-end).
However, foreign institutional investors have marginally trimmed their stake in the company. From 40.52 per cent, their holding slid to 39.55 per cent by June-end.
The steep fall in share price also seems to have attracted small retail investors. Another 22,876 individual shareholders holding nominal share capital up to Rs 1 lakh have entered the counter afresh during the period.
It may be recalled Infosys re-inducted its retired co-founder and the Chairman Emeritus of the company, N.R. Narayana Murthy, as its Executive Chairman with hopes to revive its flagging fortunes. Infosys had been missing its quarterly guidance even as TCS, Cognizant Technologies and HCL Technologies had been reporting better numbers despite the global slowdown.
Meanwhile, Infosys is scheduled to report its first quarter earnings on July 12. For Infosys, the results come too soon to assess any initial impact from NRN’s return, said Motilal Oswal, which expects margins to remain flat despite wage hikes due to rupee weakness.
Bank of America-Merrill Lynch retains Q1 revenue growth forecast of 2 per cent q-o-q in US dollar terms. “Margins this quarter to take a hit from one month impact of on-site salary hike effected February, salary hike for sales from May and increments on promotions. Utilisation could be hit by hiring. Given INR depreciation we forecast slight decline in margins sequentially,” it added.
> badrinarayanan.ks@thehindu.co.in
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