Infosys share price falls 4% as IT firm defers revenue guidance

Infosys share price fell in early trade today after the IT firm reported a sequential decline of 1.4% in its fourth quarter revenues. The firm opted to suspend annual guidance on revenues and margins for FY21 due to COVID-19 crisis which led to weak sentiment around the stock.

Share price of Infosys fell up to 3.86% to Rs 627.7 compared to the previous close of Rs 652 on BSE. Infosys share price has lost 12.95% since the beginning of this year and fallen 11.08% during the last one year. However, the stock has gained 8.9% during a month. The stock opened with a loss of 3.2% at Rs 632 today. It has lost after two days of gain.

Market cap of the firm fell to Rs 2.71 lakh crore. Share of Infosys is trading higher than 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages.

The stock hit its 52-week high of Rs 847.40 on September 6, 2019 and 52 week low of Rs 511 on March 19, 2020.

The firm reported annual revenue growth at 9.8% in constant currency terms against earlier guidance of 10%-10.5%. FY 20 net profit rose 7.97 per cent year-on-year at Rs 16,639 crore against net profit of Rs 15,410 crore in the financial year 2018-19.

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The firm posted 9.8 per cent growth in revenue at Rs 90,791 crore in FY20 as compared to Rs 82,675 crore in FY19.

Operating profit stood at Rs 19,374 crore, registering a growth of 2.6 per cent YoY. The operating margin was 21.3 per cent in FY20.

On the suspension of guidance, Infosys CEO Salil Parekh said "Given the uncertain environment due to the global pandemic and client businesses marred by volatility, we do not feel it would be appropriate for us to provide an annual guidance at this stage."

A note by Emkay Global Financial Services said, "Infosys has not provided any annual revenue guidance for FY21 for now, in line with our expectations of possibility of Indian vendors not providing an outlook given significant fluidity in the environment. We see marginal cuts to our earnings estimates for Infosys prima facie."

Net profit rose 6.10 per cent to Rs 4,321 crore in Q4 of last fiscal compared with Rs 4,074 crore in the corresponding period of last year. Revenue for the quarter increased 8 per cent to Rs 23,267 crore, it said.

Infosys fails to meet FY20 targets, suspends FY21 guidance citing uncertainty