Infosys on Thursday reported fiscal second quarter profit that met views while revenue edged by estimates. INFY stock fell on a weak fiscal 2024 revenue outlook.
The India-based information technology services firm reported EPS of 18 cents on an adjusted basis, the same as a year earlier. Revenue rose 2.5% to $4.72 billion.
Revenue growth slowed for the seventh straight quarter. Analysts had predicted EPS of 18 cents on revenue of $4.63 billion.
INFY Stock: Guidance Lowered
For fiscal 2024, Infosys said it now expects revenue growth in a range of 1% to 2.5%. At the high end, its earlier outlook had been 2.6% sales growth.
"Given the strong Q2 and robust deal bookings, the guidance cut is a disappointment and indicates a weak second half," said Jefferies analyst Akshat Agarwal in a report. "Management highlighted that while client interest in cost-efficiency programs remains strong and the company is gaining market share here, discretionary projects and large transformation programs are facing increasing scrutiny and are being ramped down."
On the stock market today, INFY stock fell 6.5% to close at 16.46. Infosys stock has retreated 8% in 2023.
"We remain cautious on the growth prospects at Infosys given the continued soft demand environment across several industry verticals," William Blair analyst Maggie Nolan said in a report. "Infosys continues to grapple with unplanned ramp-downs and longer sales cycles for large deals. We expect this environment to continue throughout fiscal 2024."
At TD Cowen, analyst Bryan Bergin said in a report: "INFY noted continued pressure on discretionary/transformation work while clients focus on cost."
Meanwhile, the company competes with India-based Tata Consultancy Services, Cognizant Technology Solutions, Accentureand others.
Infosys stock holds a Relative Strength Rating of 76 out of a best-possible 99, according to IBD Stock Checkup.
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