Infosys shares slip 3% on margin warning for December quarter

by Jonathan Adams

Shares of Infosys slipped nearly 3 per cent in trade on Tuesday after the IT giant warned of weaker margins in the December quarter and the second half of the current financial year.

The stock was the top Sensex loser and hit an intraday low of Rs 1052.05, down 2.60 per cent on the Bombay Stock Exchange (BSE).

“Margins will be weighed down mainly by lower spending by top clients due to the holiday season. The company expects a pickup in performance in the fourth quarter while maintaining its fullyear constant-currency revenue guidance of 10-12%,” said country’s second larget software services firm on a conference call with investors on Monday, as reported by Economic Times.

The report added Infosys was still facing challenges in key verticals such as energy and telecom and expected the margins to take a hit and shrink in the second half from the first, but was confident of bouncing back to industry-level growth rates in the next financial year.

“We are pretty confident given the momentum we are seeing in the first couple of quarters – the second half will be a little softer than the first half for seasonality and other reasons,” Pravin Rao, chief operating officer, Infosys told ET.

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