Infosys shares settle 9% lower after hitting one-year low; support seen at Rs 1,200 level, analysts say

Shares of Infosys plunged on Monday, extending their fall for the second consecutive session. The stock tanked 9.40 per cent to close at Rs 1,258.10 over its previous close of Rs 1,388.60. It touched an intraday low -- also its 52-week low -- of Rs 1,219 before settling a bit higher today. A total of 16.98 lakh shares changed hands today on BSE, which was more than six times compared to the two-week average volume of 2.55 lakh shares. Turnover on the counter stood at Rs 210.58 crore, commanding a market capitalisation (m-cap) of Rs 5,21,930.34 crore.

At today's closing price of Rs 1,258.10, the stock has declined 24.78 per cent from its one-year high of Rs 1,672.45, a level seen on December 1 last year. The scrip has lost 17.46 per cent so far in 2023 and 22.41 per cent in a year.

Vinod Nair, Head of Research at Geojit Financial Services, said that the market responded negatively to the weak start of the earnings season by IT companies, namely Tata Consultancy Services (TCS) and Infosys, and their cautious outlook.

Infosys, alone, pulled the benchmark BSE lower by 414 points. Sensex today settled 520 points or 0.86 per cent lower at 59,911. On NSE, sub-index Nifty IT dived 4.71 per cent. Nifty tanked 121 points or 0.68 per cent to close at 17,707.

Infosys' outlook last week followed a disappointing quarterly report from larger rival TCS, highlighting worries for the sector which earns more than 25 per cent of its revenue from the US and European banking, financial, services and insurance (BFSI) sectors.

The Bengaluru-based company's net profit stood at Rs 6,128 crore in the January-March quarter (Q4 FY23).

On the technical front, support on the counter could be seen at Rs 1,200, analysts suggested.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, "The counter has seen a massive beating due to weak Q4 numbers. At present, it has taken support near Rs 1,200 level which is also its historical support. Moreover, it is trying to make a classic hammer structure near the said support of Rs 1,200. For the coming few days, one needs to see whether it holds Rs 1,200 levels, if it sustains above it then we may see Rs 1,350. As of now wait and watch"

AR Ramachandran from Tips2trades said, "Below average Q4 FY23 results with a weaker than expected guidance for FY24 has led to a sharp fall in Infosys today. Technically, Infy looks oversold and should find strong support at Rs 1,200. Rs 1,270 will act as a strong resistance in the coming days."

The stock traded lower than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 24.67. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 24.98. It has a price-to-book (P/B) value of 8.58.

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