Shareholders of IT major Infosys might have to see a red day on Friday as its American Depositary Receipts (ADRs) were trading nearly 10% lower on Nasdaq on Thursday after its Q1 result announcement.
AT 1007 hours New York Time, Infosys' ADRs wer trading 9% lower at $16.11. The IT major halved its full-year revenue forecast on Thursday as clients cut back spending and delayed making decisions on future projects in a challenging economic environment.
Infosys Lts slashed its full-year revenue growth to 1%-3.5% on a constant currency basis from 4%-7% previously.
"We have seen some of the deal signings and start dates being delayed, with that we see a lot of revenue from those large and mega deals towards the later part of the financial year," Infosys CEO Salil Parekh said in a media conference.
Parekh attributed the cut in revenue growth guidance to "overall delay in decision-making" by clients.
"Through the (June) quarter we have seen volumes in some of the clients impacted, where they were reducing transformational projects or slowing down decision-making," he said.
Infosys's headcount fell sequentially by 6,940 as the company did not backfill employees who left.
Jefferies termed Infosys's "drastic" revenue guidance cut a "shocker", adding that the headcount decline also suggested limited growth visibility in the near term.
Consolidated net profit for Infosys rose 10.9% to Rs 5,945 crore in the three months to June 30.
Infosys saw its large deal signings rise to $2.3 billion from $1.7 billion a year ago.
The company maintained its operating margin guidance for the full year at 20-22%, while margins for the quarter ended June 30 came in at 20.8%.
With inputs from Reuters