You are currently viewing Infosys Q2 Results: Infy ADR Plummets 7%

Infosys Q2 Results: Infy ADR Plummets 7%

Following the release of Infosys Q2 results for FY24, the company faced a significant drop in the value of its American Depository Receipts (ADRs).

Infosys’s ADRs witnessed a substantial drop of 7.18% to $16.34 by 11:44 p.m. (Indian Standard Time) on the New York Stock Exchange (NYSE). On the National Stock Exchange of India (NSE), Infosys’s share price closed at ₹1,452.3 on Thursday, a decline of 2.82%.

Weak Guidance after Infosys Q2 Results

The revision of revenue guidance surprised the market during the September quarter’s results. It is the primary reason for the massive decline in Infy ADR resulting from Infosys’s decision to revise its revenue growth projections for the fiscal year 2024 (FY24).

In the financial results for Q2 FY24, Infosys decided to revise its initial revenue growth forecast for FY24.

You can click here to check Infosys ADR prices!

The adjustment brought the earlier range of 1% to 3.5% down to a more conservative estimate of 1% to 2.5% for FY24. In constant currency terms, Infosys now expects revenue growth for FY24 to fall within the range of 1% to 2.5%.

Interestingly, the company decided to maintain its operating margin forecast, which remains at 20% to 22% for the entire year.

Notably, in the Q1 FY24 results, Infosys had previously reduced its FY24 revenue outlook significantly, moving from a broader range of 4% to 7% down to the newly narrowed range of 1% to 3.5%.

Infosys Q2 results fy24

Infosys Posted Strong Net Profit and Revenue

In the Infosys Q2 results of the current fiscal year, the IT giant achieved a significant year-over-year increase in its consolidated net profit, reaching 3.2%.

The consolidated net profit surged to ₹6,212 crore, as opposed to the ₹6,021 crore reported in the same period of the previous year. This growth in net profit amounted to a healthy 4.5%.

Furthermore, the consolidated revenue from operations saw a notable increase. It rose to ₹38,994 crores during the quarter ending in September from ₹36,538 crores in Q2FY23. On a sequential basis, this marked a 2.8% increase from ₹37,933 crores reported in Q4 FY23.

In addition to the financial statistics, Infosys is currently facing several challenges. These challenges include a significant decline in discretionary programs, the completion of transformation projects, and a consistently slow decision-making process.

Salil Parekh Raised Concerns about Infosys

Salil Parekh, the CEO and Managing Director, raised these concerns during a press conference that took place on Thursday. Mr. Parekh explained the guidance for the remainder of the financial year.

One of the factors that influenced this weak guidance was the limitations on volumes experienced by the company during the September quarter.

But he also highlighted the positive impact of securing substantial contract wins on the company’s prospects. However, he acknowledged that some of the ramp-ups associated with these contracts may encounter delays.

Therefore, these delays have played a pivotal role in the revision of the company’s guidance for the fiscal year.

For more exciting articles, please visit Sensitrend Home!

Source: Internet

Leave a Reply