Last updated: July 21, 2023, 10:42 AM IST
Infosys announced its Q1 (FY 2023-24) results on July 20, 2023
Infosys shares have been under selling pressure since the stock market opened; What should investors do now?
Infosys stock price today: Infosys shares have been under selling pressure since the stock market opened. This comes after India’s second-largest IT services company, while announcing its Q1FY24 results, sharply cut its revenue forecast for FY24 to 1.0 percent – 3.5 percent in constant currency (CC), from 4 percent -7 percent in the previous quarter.
Infosys share price opened lower today, hitting an intraday low of Rs 1,305 apiece, falling about 10 percent within minutes of the stock market’s opening bell today.
What should investors do?
Analysts following the stock have a mixed view on the stock, but insist the sharp cut in FY24 revenue guidance was surprising and concerning. For example, Motilal Oswal Securities said in its earnings statement: “While the forecast cut is concerning and should be negative for the stock price in the near term (in part due to the 11% gain over the past month), we view the miss as more of a perception issue than an operational one, as the previous outlook was overly optimistic in the current environment.”
The brokerage added: “We are lowering our estimates for FY24 below guidance (previously at 3.8 percent annualized CC) by 120 basis points (bps) despite the 325 bps cut in guidance midway through, to account for weaker demand commentary and project delays. We take comfort in the current 1Q-4QE revenue growth estimate for Infosys, which is similar to that of its peers, despite lower revenue growth in FY24E of 2.6 percent YoY CC.”
The brokerage has maintained a “BUY” call on the stock with a target price of Rs 1,600 (up 10 percent from yesterday’s close).
Anuj Gupta, Vice President — Research at IIFL Securities said of Infosys’ share price outlook, “The main reason to be bearish on Infosys stock is the company’s decision to cut its FY24 revenue guidance from 4-7 percent to 1-3.5 percent. This did not go down well with investors in the stock market around the world. On NYSE, Infosys ADR shares fell after the weak guidance call to hit the low of $15.33 apiece, losing 13.50 percent from Wednesday’s close of $17.71 apiece on NYSE.
The IIFL Securities expert advised Infosys shareholders to stop on the upside as the stock may fall below Rs 1,300 per share in the near term.
On advice to Infosys shareholders, Sumeet Bagadia, Executive Director at Choice Broking said, “Infosys shares have breached the immediate support of Rs 1,350 each. Infosys stock may become more weak in the near term.”
Anuj Gupta of IIFL Securities advised ‘exit on rise’ to Infosys shareholders, saying, “Infosys shares look weak and may go below the Rs 1,300 level. So my advice to Infosys shareholders is to get out on any rise and re-enter in the Rs 1250 to Rs 1280 range.”
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