Infosys shares have been under selling pressure since stock market‘s opening; What should investors do now?
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Infosys Share Price Today: Infosys shares have been under selling pressure since the stock market’s opening. This comes after, India’s second-largest IT services firm, while announcing its Q1FY24 results, sharply lowered its FY24 revenue guidance to 1.0 per cent – 3.5 per cent in constant currency (CC) terms, compared to 4 per cent -7 per cent guided in the previous quarter.
Infosys share price today opened lower and went on to hit intraday low of Rs 1,305 apiece levels, logging around 10 per cent dip within few minutes of stock market’s opening bell today.
What Should Investors Do?
Analysts tracking the stock have a mixed stance on the stock but maintain that the steep cut in the FY24 revenue outlook was surprising and is a concern. For instance, Motilal Oswal Securities, in its earnings review note, said,” While the guidance cut is concerning and should be negative for the share price in the short term (partially due to the 11% gain in the last month), we view the miss as more of a perception issue than an operational one as the earlier guidance was too optimistic in the current environment.”
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The brokerage added, “We lower our below-guidance FY24 estimates (earlier at 3.8 per cent YoY CC) by 120 basis points (bps) despite the 325 bps cut in guidance at the mid-point, to take into account the weaker demand commentary and project delays. We take comfort in the current 1Q-4QE revenue growth run rate estimate for Infosys, which is similar to its peers, despite lower FY24E revenue growth of 2.6 per cent YoY CC.”
The brokerage has maintained a “BUY” call on the stock with a target price of Rs 1,600 (10 per cent up from yesterday’s close).
Speaking on Infosys share price outlook, Anuj Gupta, Vice President — Research at IIFL Securities said, “Major reason for being bearish on Infosys shares is company’s decision to slash FY24 revenue guidance to 1-3.5 per cent from 4-7 per cent. This hasn’t gone down well among the stock market investors across globe. On NYSE, Infosys ADR shares nosedived after the weak guidance call and hit intraday low of $15.33 apiece, losing to the tune of 13.50 per cent against its Wednesday close of $17.71 apiece on NYSE.”
The IIFL Securities expert advised Infosys shareholders to exit on rise as the stock may go down below Rs 1,300 per share levels in near term.
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On advise to Infosys shareholders, Sumeet Bagadia, Executive Director at Choice Broking said, “Infosys shares have breached its immediate support placed at Rs 1,350 apiece levels. Infosys shares may see more weakness in near term.”
Advising ‘exit on rise’ to Infosys shareholders, Anuj Gupta of IIFL Securities said, “Infosys shares are looking weak and it may go below Rs 1,300 levels. So, my advice to Infosys shareholders is to exit on any rise and re-enter at in Rs 1250 to Rs 1280 range.”
