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Narayana Murthy remark triggers manic Infy stock slump

Infosys stocks saw its second biggest percentage fall of 8.7 per cent on Thursday after cofounder and executive chairman N. R. Narayana Murthy announced that revenue for the fiscal year could grow at the lower end of the company's 11.5- 12- per cent projection.

Mail Today Bureax   Bangalore/Mumbai     Last Updated: March 14, 2014  | 09:46 IST
Murthy remark triggers manic Infy stock slump

The stock of IT software behemoth Infosys saw its second biggest percentage fall of 8.7 per cent on Thursday after cofounder and executive chairman N. R. Narayana Murthy announced that revenue for the fiscal year could grow at the lower end of the company's 11.5- 12- per cent projection.

Murthy also forecast an operating margin of 23.5 per cent, which was sharply lower than the 29.5 per cent in the year before his return. In January, Infosys raised its revenue growth outlook range to 11.5-12 per cent from 9-10 per cent forecast in October based on expectations of increased demand for its IT outsourcing business. On Wednesday, Murthy said without elaborating that growth was " much more like" 11.5 per cent.

Murthy set a threeyear target to boost big-ticket contracts and build a predictable earnings model when he returned. However, Infosys is still struggling to increase revenue from its software platforms and high- margin consulting business.

Infosys shares slumped by 8.54 per cent on Wednesday. The fall was the steepest percentage fall since April 12 last year, when shares crashed 21.3 per cent after Infosys issued a disappointing forecast for full-year sales growth.

Courtesy: Mail Today 

 

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