Infosys witnessed a 3% decrease in its share price, dropping to Rs 1,379.70, marking a five-month low on the BSE after the company disclosed a revenue growth projection of 1-3% in constant currency for the financial year 2024-25 (FY25). The stock's value closed at Rs 1,411.60, down by 0.63%, the lowest level recorded since November 13, 2023. In contrast, the S&P BSE Sensex concluded 0.83% higher at 73,088. Infosys has experienced an 18.5% decline from its 52-week high of Rs 1,731 achieved on February 6, 2024.
Despite the subdued revenue forecast for FY25, Infosys management is confident about enhancing margins and has upheld its guidance within the 20-22% band. While analysts perceive a weakness in the company's lower projection for FY25 revenue and diminishing headcount, they anticipate that deal wins will sustain medium-term growth prospects. Despite the short-term challenges, the brokerage firm foresees Infosys as a key beneficiary of the anticipated uptick in IT expenditure in the medium term.
Analysts at various financial establishments share concerns regarding Infosys's performance due to factors like reduced discretionary spending and decision-making delays affecting the conversion of contracts. The company's revenue outlook for FY25 remains modest at 1-3% YoY CC, impacting its near-term growth due to dependencies on discretionary spending that may lead to challenges in execution. However, Infosys remains optimistic about a potential recovery in the banking, financial services, and insurance sector, which could drive revenue growth and margin improvements. Furthermore, the acquisition of an Automotive ER&D company, in-tech, is seen as a lucrative opportunity by brokerage analysts for high growth and margin expansion.