Infosys shares hit lower circuit: LIC, Murthy family lost big within seconds. Here're key details

A steep fall in Infosys shares erased billion dollars out of the IT firm's market capitalisation, with key shareholders such as Life Insurance Corporation of India (LIC) and Murthy family taking a big hit notionally within the first few seconds of trading on Monday, thanks to the IT giant's poor set of quarterly results and soft FY24 revenue guidance.

LIC owned 28,13,85,267 shares or 7.71 per cent stake in the IT firm at the end of December quarter, which were worth Rs 39,073 crore as on Thursday's closing. Following Infosys' 10 per cent plunge on Monday morning, the holding value for LIC dropped to Rs 35,166, down Rs 3,907 crore within seconds.

In the case of Murthy family, Rohan Murthy's stake in the company was valued at Rs 8,444.47 crore, which has fallen to Rs 7,600 crore at last count, down Rs 844 crore. Akshata Murty's 1.07 per cent stake in the Bengaluru-based firm was worth Rs 5,409.58 crore as of Thursday's closing, slipped to Rs 4,868.66 crore, down 541 crore. Rohan is the son of Infosys founder Narayana Murthy while Akshata is his daughter.

Read more: Infosys shares brace for selloff post soft Q4 results, guidance. Here're revised price targets

Sudha N Murthy, the wife of Narayana Murthy owned 0.95 per cent stake worth Rs 4,797.69 crore as of Thursday's closing, which has fallen Rs 480 crore to Rs 4317.96 crore. Meanwhile, Murthy's 0.46 per cent stake in Infosys is worth Rs 2,080 crore now against Rs 2,311.41 crore as of Thursday, down Rs 231.12 crore.

Shares of Infosys hit lower circuit limit at Rs 1,249.75, as a host of brokerages cut their target prices for the stock. The stock now commands Rs 5,18,466 crore in market capitalisation against Rs 5,76,069 crore as on Thursday.

Among institutions, SBI Mutual Fund lost Rs 2,239.55 crore notionally on its investment in Infosys. It now holds Infosys shares worth Rs 20,157 crore against Rs 22,397 crore as on Thursday. ICICI Prudential MF took Rs 1,226.79 crore in notional hit. It owns Rs 11,041 crore worth Infosys shares.

Meanwhile, Sudha Gopalkirshnan lost Rs 1,324 crore on 9,53,57,000 shares or 2.61 per cent stake she held in the company. She now owns Rs 11,917 crore worth Infosys shares against Rs 13,241 crore in the previous session.

Nomura India said guidance was weak for FY24 and that growth differential with TCS is set to narrow, as the foreign brokerage downgraded the stock to 'Neutral' and  cut its target price to Rs 1,290. Infosys now requires 1.7 per cent to 2.8 per cent compounded quarterly growth rate over the next four quarters to meet its guidance—the top end appears to be a rather tall ask, said Nuvama Institutional Equities.

"Our bear case analysis implies profit estimate cut of 9-10 per cent. We now value Infosys at 22 times FY25 EPS (25 times earlier), 20 per cent discount to our TCS target multiple on lower growth and margins assumptions and price target of Rs 1,590 against Rs 1,910 earlier)," Phillip Capital said.

Infosys now requires 1.7 per cent to 2.8 per cent compounded quarterly growth rate over the next four quarters to meet its guidance—the top end appears to be a rather tall ask, said Nuvama Institutional Equities.

"FY24E EBIT margin guidance has been also trimmed to 20–22 per cent (from 21–22% in FY23). The mid-point of the guidance will be the same as the FY23 exit margin—indicating significant cost pressures the company expects from wage hike and lower growth (offsetting the tailwinds of lower attrition, sub-con cost and supply-side challenges)," it said while suggesting a revised target of Rs 1,610 from Rs 1,900 earlier.

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