Infosys Hits 16-month Low As IT Stocks Plummet Amid Pressure On Margins
September 23, 2022: Infosys Ltd shares fell in six of his seven sessions on Thursday, hitting a 16-month low. Shares are down nearly 7.6% so far in September, down about 27% year-to-date.
The share price hit a low of Rs 1,360 per share. This is the level last seen on May 25, 2021, down 0.8%. Meanwhile, TCS is down 6% since the start of the month, Wipro is down 4% and Tech Mahindra is down 2%.
Since early January, TCS is down over 19%, Wipro is down over 44%, and Tech Mahindra is down 41%. Profitability concerns and global economic uncertainty have put IT stocks under pressure.
His 2023 growth outlook for Accenture is in the spotlight and will set the tone for growth forecasts for the IT services industry as a whole.
Accenture Plc, whose fiscal year ends August 31, will report fourth-quarter results on Thursday after the close of trading in India.
Bloomberg Consensus estimates for the fourth quarter of 2022 show that Accenture’s revenues were $15.38 billion, up 14.7% year-over-year, down from the forecast range of $15 billion to $15.5 billion (12-15 % year-on-year).
Margins are expected to reach 14.7% for the fourth quarter of FY22 and 15.2% for the full year of FY22, in line with guidance.
Analysts expect a potential economic slowdown in some of the world’s largest economies could cause clients to cut discretionary spending. This could slow the growth momentum of IT services revenue.
This scenario could put pressure on his IT services industry in India in the short term. However, long-term IT spending remains resilient, analysts added.
Recent executive comments and market expectations from leading IT companies indicate that the September 2022 quarter will continue to be strong in terms of constant currency revenue growth.
However, both companies appear less bullish on 2HFY23 and have not explicitly commented on
the strong demand.
The market hopes there will be no major downside surprises on the sales front in the second half of 2023, although it may be seasonally weak.
The Federal Reserve’s recent hawkish comments and expectations for tighter monetary policy have increased the risk of a deep recession.
“We are in a flat US recession camp, which has led to low to mid-single digit revenue growth for Indian Tier 1 IT players and high single digit growth for Tier 2 sets.
We believe it will grow, and we are generous with supply-side pressures this year, and volatility is unlikely to be a major concern,” Nirmal Bang said in its latest release.
Goldman Sach downgraded TCS, Infosys, and Tech Mahindra, citing a significant drop in revenue growth forecasts for the IT sector.
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