Fri Oct 18 07:44:41 UTC 2024: ## Infosys Shares Plunge 5% Despite Upgraded Guidance
**Bangalore, India** – Shares of Infosys Ltd. plummeted by 5% on Friday, following the release of its Q2 FY25 results. The stock price fell to Rs 1,869 as investors reacted to the company’s lower-than-expected financial performance and revenue guidance.
While Infosys did raise its FY25 revenue growth guidance to 3.74%-4.5%, up from the previous estimate of 3%-4%, analysts deemed this upgrade insufficient, falling short of market expectations. Domestic brokerage Motilal Oswal highlighted the company’s cautious outlook on discretionary spending, attributing the disappointment to ongoing challenges outside the US banking sector, with limited recovery in discretionary expenditures.
The company’s decision to postpone wage hikes for the fourth quarter of FY25 and the first quarter of FY26 further signaled uncertainties in the near term. Motilal Oswal noted that the guidance upgrade was only by 50 basis points despite strong growth in the first half of the year, suggesting a muted growth rate for the latter half of FY25.
Despite the negative sentiment, some optimism emerged from the company’s performance in smaller deals, those worth less than USD 50 million in total contract value. Although Infosys avoided declaring this a trend, Motilal Oswal believes it could signal an early return of business flow, potentially positioning the company favorably for FY26.
Infosys reported a profit after tax (PAT) of Rs 6,506 crore for the second quarter ending in September 2024, a 5% year-on-year (YoY) increase from the same period last year. However, this figure fell below market expectations, which had forecasted Rs 6,700 crore. Revenue from operations grew by 5% YoY, reaching Rs 40,986 crore, compared to Rs 39,360 crore in the same quarter last year.
The company also declared an interim dividend of Rs 21 per equity share, with October 29, 2024, as the record date and payment scheduled for November 8, 2024.
First Piper 