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Infosys registers biggest percentage loss in 10 years; analysts cautious
By ECONOMICTIMES.COM | 13 Apr, 2013, 02.00AM IST
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NEW DELHI: Infosys Ltd plunged over 20 per cent on Friday to
mark its biggest percentage loss since April 2003 as investor sentiment turned
bearish on lower-than-expected dollar revenue growth forecast for the current
fiscal.
India's second largest IT services exporter dented market expectations by giving FY14 dollar revenue guidance of 6-10%, which is lower than both market and Nasscom estimates.
InfosysBSE -21.33 % closed 21.33 per cent lower on Friday at Rs 2295.45. It hit a low of Rs 2268 and a high of Rs 2626.10 in trade today.
On Thursday, Infosys managed to scale Rs 2900 levels. But on results day, the stock plunged over 21 per cent, wiping out over Rs 30,000 crore from its market value in a single day, wiping off most of its gains made in 2013.
"Infosys results are a disaster. FY14 revenue guidance 6-10 per cent growth is disappointing. We reckon a large part of the adjustment has already happened today itself," CLSA said in a note.
CLSA is of the view that the stock should find support around the Rs 2,400 mark. "Infosys' scorecard induced selling in other IT names as well. We didn't think that their numbers were going to be this extreme," said the CLSA note.
Investors have been hiding in the IT stocks as a safe haven in case of a rupee fall given lot of negative news on Indian economy.
"If the rupee does not fall, I don't see any upside in the IT stocks and today is an example of how this can hit you if you go aggressive on IT stocks right now," said Bhavin Shah, CEO, Equirus Securities.
Infosys numbers have clearly disappointed and the headlines are quite terrible, said Shankar Sharma of First Global. Sharma told ET Now that after surprising positively in the last quarter, Infosys erased all the gains it made after good Q3 results.
Stating that the picture doesn't look "pretty", Sharma went on to opine that the IT sector may no longer be a relatively safe haven to invest in. "There are very few places or sectors left to hide in," he added.
Most IT analysts say the stock is likely to be downgraded as EPS downgrades are expected following disappointing performance and guidance.
"The company has not even given EPS guidance for the year, and has continued with not giving out quarterly guidance, something it started in 2QFY13. Thus, quality of guidance and extent of "information asymmetry" that the company seeks to address when giving out guidance, has clearly worsened," Nirmal Bang said in a note.
India's second largest IT services exporter dented market expectations by giving FY14 dollar revenue guidance of 6-10%, which is lower than both market and Nasscom estimates.
InfosysBSE -21.33 % closed 21.33 per cent lower on Friday at Rs 2295.45. It hit a low of Rs 2268 and a high of Rs 2626.10 in trade today.
On Thursday, Infosys managed to scale Rs 2900 levels. But on results day, the stock plunged over 21 per cent, wiping out over Rs 30,000 crore from its market value in a single day, wiping off most of its gains made in 2013.
"Infosys results are a disaster. FY14 revenue guidance 6-10 per cent growth is disappointing. We reckon a large part of the adjustment has already happened today itself," CLSA said in a note.
CLSA is of the view that the stock should find support around the Rs 2,400 mark. "Infosys' scorecard induced selling in other IT names as well. We didn't think that their numbers were going to be this extreme," said the CLSA note.
Investors have been hiding in the IT stocks as a safe haven in case of a rupee fall given lot of negative news on Indian economy.
"If the rupee does not fall, I don't see any upside in the IT stocks and today is an example of how this can hit you if you go aggressive on IT stocks right now," said Bhavin Shah, CEO, Equirus Securities.
Infosys numbers have clearly disappointed and the headlines are quite terrible, said Shankar Sharma of First Global. Sharma told ET Now that after surprising positively in the last quarter, Infosys erased all the gains it made after good Q3 results.
Stating that the picture doesn't look "pretty", Sharma went on to opine that the IT sector may no longer be a relatively safe haven to invest in. "There are very few places or sectors left to hide in," he added.
Most IT analysts say the stock is likely to be downgraded as EPS downgrades are expected following disappointing performance and guidance.
"The company has not even given EPS guidance for the year, and has continued with not giving out quarterly guidance, something it started in 2QFY13. Thus, quality of guidance and extent of "information asymmetry" that the company seeks to address when giving out guidance, has clearly worsened," Nirmal Bang said in a note.
Source :- http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/infosys-registers-biggest-percentage-loss-in-10-years-analysts-cautious/articleshow/19512202.cms
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