Infosys Shares Plunge 6.5% Post Quarterly Numbers

Shares in Infosys fell as much as 6.5% and were last seen trading at Rs 1633, as investors sold into the stock post the quarterly numbers.

Infosys saw net profit rising 12% t o Rs 5,686 crore for the quarter ended March from Rs 5,076 crore in the year-ago period while its revenue grew nearly 23% to Rs 32,276 crore as compared to Rs 26,311 crore year-on-year (YoY).

Markets were unhappy particularly on the margins front at the company. "Going forward, the headwinds on margins are increase in travel, facility, communication expenses, higher onsite/offsite wage revision; and declining employee utilisation rates. Tailwinds are pyramid optimisation, improvement in Daimler profitability, reducing sub-con costs, and pricing power," said analysts at ICICI Securities.

"The company disappointed with a muted constant currency (CC) revenue growth of 1.2% q-o-q, after clocking excellent revenue growth for the last three quarters. Reported US Dollar revenues grew by 0.7% q-o-q to $4,280 million, below our expectations. EBIT margin contracted by 193 bps q-o-q to 21.6%, much lower than our estimates, owing to lower working calendar days, client contractual provisions, lower utilisation and higher visa expenses," Sharekhan said in a report.