Infosys Q4: Why Shares Tanked Nearly 7% Despite Bonus Issue - NDTV

Infosys shares fell nearly 7 per cent on Friday after the company reported its March quarter earnings. The huge selloff in Infosys, the stock with the largest weightage in the Nifty, had a damaging impact on broader markets. The BSE Sensex slumped over 300 points, while the Nifty slipped more than 100 points. The huge selloff in Infosys is surprising because the company also announced a bonus issue, a move seen to benefit investors.
 

Here's why Infosys came under huge selloff on Friday:

1) In dollar terms, Infosys revenues dropped by 2.6 per cent in constant currency during the fourth quarter, a big negative considering all its competitors had reported an uptick in dollar revenue growth. TCS had reported a 1.6 per cent growth in dollar revenues, HCL Tech grew at 2.7 per cent and Wipro posted a 1.2 per cent growth.

2) For 2014-15 year, Infosys reported a constant currency revenue growth of 5.6 per cent, missing estimates of 7-9 per cent growth. For the 2015-16 fiscal year, Infosys expects to grow at 10-12 per cent, which is seen as ambitious.

3) Infosys reported an operating or EBIT margin of 25.7 per cent against estimates of 26 per cent. Infosys operating margin in the March quarter is 100 basis points lower than 26.7 per cent it reported in December quarter.

via Business - Google News http://ift.tt/1DqFAkU

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