Infosys cutting its full-year revenue growth guidance provides more context to the initial report.Here’s a breakdown:
Infosys Growth Guidance Cut:
Infosys, a major player in the IT sector, experienced a surprise cut in its growth guidance. This unexpected adjustment is the second in a row.
Despite a resilient performance in the September quarter, the revised growth guidance had a negative impact on investor sentiment.
Stock Performance:
As a result of the cut in growth guidance, shares of Infosys opened 4.5 percent lower in early trade on October 13. This suggests a significant drop in the company’s valuation at the market opening.
At 09.16 am, Infosys shares were trading 2.9 percent lower at Rs 1,422.80 on the NSE (National Stock Exchange).
ADR Performance:
The impact was not limited to the domestic market; the New York Stock Exchange-listed American Depository Receipts (ADRs) of Infosys also recorded a sharp decline.
The ADRs of Infosys dropped by 6.5 percent to settle at $16.46 on October 12. This drop in ADRs is likely a reflection of the weak growth outlook provided by the company along with its quarterly earnings report.
Investor Sentiment:
The surprise cut in growth guidance, especially after a resilient performance in the previous quarter, soured investor sentiment. Investors often react strongly to changes in the expected future performance of a company.
