Infy shares slip 3% af­ter out­look dis­ap­points


In­fosys’ shares slid 3 per cent af­ter the In­dian IT ser­vices giant said it ex­pected op­er­at­ing mar­gins lower than the pre­vi­ous year’s.

The firm is fore­cast­ing an op­er­at­ing mar­gin of 22-24 per cent this year, lower than pre­vi­ous year’s 23-25 per cent view. That fell short of in­vestors’ ex­pec­ta­tions, Cit­i­group an­a­lyst Suren­dra Goyal said, given its an­nual sales fore­cast only man­aged to match es­ti­mates.

In­fosys dived as much as 6 per cent Mon­day, its steep­est in­tra-day fall since Au­gust. The stock, how­ever, man­aged to re­coup half of the losses to end 3.15 per cent lower at ~1,134.5

In­fosys, which vies with TCS to pro­vide back­of­fice sup­port for the world’s largest cor­po­ra­tions, is in­vest­ing to ac­cel­er­ate a shift away from labour-in­ten­sive work under new CEO Salil Parekh. In­dia’s $167-bil­lion IT ser­vices in­dus­try is in­vest­ing in cloud com­put­ing and ar­ti­fi­cial in­tel­li­gence to jump-start growth, as clients in key seg­ments from bank­ing to re­tail turn in­creas­ingly to au­to­ma­tion.That spend­ing on ad­vanced tech­nolo­gies is pres­sur­ing mar­gins, an­a­lysts said.

Like its peers, In­fosys’ hir­ing costs are also ris­ing along­side the Don­ald Trump ad­min­is­tra­tion’s im­mi­gra­tion curbs, and the need to in­stall and train a vast work­force un­ac­cus­tomed to newer dig­i­tal ser­vices. In­fosys only re­cently emerged from a highly dis­rup­tive and pub­lic con­flict with its pow­er­ful co-founder co­hort, a board­room tus­sle that pushed out for­mer CEO Vishal Sikka.

“In­vest­ments in dig­i­tal ca­pa­bil­i­ties through 2019 will likely de­lay mar­gin ex­pan­sion,” said Anurag Rana, an an­a­lyst with Bloomberg In­tel­li­gence.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.