Infosys ADR spikes 5% despite weak Q3 performance

A weak demand condition forced Infosys to tweak its growth guidance for the current financial year for the third consecutive time. It sees revenue growing 1.5-2 percent in constant currency terms in FY24, against 1.0-2.5 percent guided earlier.

Infosys ADR (American Depository Receipt) shares jumped nearly 5 percent even as the company reported a drop in net profit for the quarter ended December 2023.

India’s second-largest IT services company reported a 7.3 percent year-on-year (YoY) fall in net profit at Rs 6,106 crore in the third quarter of FY24. This was below Moneycontrol’s poll estimates of Rs 6,244 crore.

As of 8.25 pm IST, the stock traded up 4.61 percent at $18.93 per share on NYSE. The rise in price can be indicative of a similar reaction on January 11 when the domestic market opens.

Also read: Infosys to skip campus hiring again, TCS to resume from FY25

A weak demand condition forced Infosys to tweak its growth guidance for the current financial year for the third consecutive time. It sees revenue growing 1.5-2 percent in constant currency terms in FY24, against 1.0-2.5 percent guided earlier.

Consolidated revenue for the quarter came in at Rs 38,821 crore, up 1.3 percent YoY. Revenues for the quarter were marginally above analyst estimates of Rs 38,630 crore.

The EBIT margin or the operating margin was down 70 bps to 20.5 percent, which was affected by furloughs and salary hikes. The company retained its operating margin guidance of 20-22 percent.

“Our performance in Q3 was resilient. Large deal wins were strong at $3.2 billion, with 71 percent of this as net new, reflecting the relevance and strength of our portfolio of offerings ranging from generative AI, digital and cloud to cost, efficiency and automation," Salil Parekh, CEO and MD, was quoted as saying in a press release.

Also read: Infosys to acquire a semiconductor design firm for Rs 280 crore