Shares of Indian IT company Infosys took a significant hit in early trading on Friday, following the company’s announcement of a lowered full-year revenue guidance in its latest earnings report.
At one point, the stock was down 9.5%, and it currently sits 7.6% lower at 1,338.25 Indian rupees ($16.29).
The decline occurred after Infosys released its fiscal first-quarter results on Thursday. While the company experienced a 5.1% increase in net profit for the April-June period and a 4.1% growth in revenue, it also decided to reduce its full-year revenue growth forecast. Initially projected at 4%-7%, the revised guidance now expects growth between 1% and 3.5% on a constant-currency basis.
Nomura analysts characterized this adjustment as a “key disappointment,” signaling weaker discretionary demand from clients. They anticipate that Infosys may struggle to keep up with industry growth in the upcoming months. As a result, they have downgraded Infosys to a Reduce rating from Neutral and adjusted its stock target price to INR1210, down from INR1260.
Despite these challenges, Infosys remains optimistic about its future prospects and is determined to navigate through the ever-evolving IT landscape.