Infosys Share: Shares of IT giant Infosys experienced a 4% decline in early trading on October 18 after the company reported a slight miss in its Q2 earnings. Despite a sequential increase in net profit, the results fell short of analyst expectations, prompting concerns among investors.
Q2 Earnings Report: Infosys Shares
For Q2 FY25, Infosys reported a consolidated net profit of ₹6,506 crore, reflecting a 2.2% increase quarter-on-quarter. However, this figure fell short of Moneycontrol’s estimate of ₹6,769 crore. Revenue from operations rose by 4.2% to ₹40,986 crore, just missing the forecast of ₹40,857 crore. This earnings miss triggered a market reaction, leading to a slip in the stock price.
Market Response and Brokerage Insights
Brokerage firm Morgan Stanley predicted a potential stock correction for Infosys due to the earnings miss but advised investors to consider building fresh positions during this period. They noted strong support for the stock at its five-year average free cash flow multiple of ₹1,780, suggesting that the stock could stabilize at this level after initial volatility.
Intraday Stock Movement: Infosys Shares
Following the earnings report, Infosys shares hit a day’s low of ₹1,889 shortly after the market opened. However, the fall was quickly mitigated as buyers stepped in, with the stock recovering to ₹1,936.85 on the NSE by 09:24 am. American Depository Receipts (ADRs) on the New York Stock Exchange also saw a 4% dip but settled only 1% lower.
Positive Outlook Despite Setbacks: Infosys Shares
Despite the earnings miss, Infosys raised its FY25 revenue guidance to 3.75-4.5% in constant currency terms, up from the previous estimate of 3-4%. This revision reflects improved performance and increased volumes, indicating a potential revival in discretionary spending. Brokerages such as Nomura and Nuvama Institutional Equities view this guidance upgrade as a positive sign, suggesting that Infosys could benefit significantly from increased discretionary spending in the sector.
