Infosys shares drop 4% after disappointing Q2 profit results
- Infosys reported a net profit of ₹6,506 crore for Q2, a 4.7% increase from last year, but missed analyst expectations.
- The company's share price fell over 4% to ₹1,889 as investors reacted to the disappointing profit results despite revenue exceeding forecasts.
- Brokerages maintained varied ratings on Infosys, with optimism about long-term growth prospects amid a mixed short-term outlook.
On October 18, 2024, Infosys, an Indian multinational corporation, experienced a drop in its share price after reporting its Q2 profit results for the September quarter. The company's net profit rose to ₹6,506 crore, a modest increase from ₹6,212 crore in the same quarter last year. However, despite exceeding revenue expectations with ₹40,986 crore, the profit figures missed analysts' estimates. This led to a decline of over 4%, hitting an intraday low of ₹1,889. In light of these results, Infosys announced an interim dividend of ₹21 per share, declaring October 29 as the record date and November 8 as the payout date. Furthermore, the company adjusted its FY25 revenue growth guidance to a range of 3.74% to 4.50%, projecting an operating margin between 20% and 22%. These revisions may influence investor sentiment and future stock performance. Several brokerages provided their assessments following the announcement. Nomura maintained a 'buy' rating and projected a target price of ₹2,130, advising investors to take advantage of potential short-term price corrections. Bernstein raised its target to ₹2,270, citing the company’s healthy deal momentum as a strong positive factor. Conversely, Investec reiterated a 'sell' recommendation, citing a lack of catalysts for share price improvement in the coming months. Overall, while brokerages have varying perspectives, there is a general sentiment of cautious optimism about Infosys's longer-term growth prospects within the IT sector as the market adjusts to recent developments.