Infosys’ outlook followed a disappointing quarterly report from larger rival Tata Consultancy Services, highlighting worries for the sector which earns more than 25% of its revenue from just the U.S. and European banking, financial, services and insurance sector.
The collapse of two mid-sized U.S. lenders in March had left the financial ecosystem shaken and driven an extraordinary government effort to reassure depositors and backstop the system.
Infosys saw its biggest intraday percentage drop since October 2019, and dragged other IT stocks, with the Nifty IT index dropping as much as 7.6%.
India’s second-largest IT services firm on Thursday said it expects revenue growth of 4%-7% for the fiscal year ending March 2024, well below analysts’ expectations of 10.7% growth, as clients deferred spending due to growing fears of a recession. The previous slowest growth was a 5.8% increase in fiscal 2018.
“Given the uncertain environment in the near term, growth can be back ended for Infosys, in our view,” PhillipCapital said in a note.
The Bengaluru-based company’s net profit of Rs 61.28 billion ($748.21 million) in the January-March quarter also missed analysts’ expectations of Rs 66.24 billion, according to Refinitiv IBES.
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