2023-04-18 05:33:02
The Infosys Crash: Is it Time to Panic?
“Whether More Fall to Come in Infosys?”
The Indian stock market has been experiencing bearish trends, all thanks to the Nifty IT Index which comprises ten technology stocks, including Infosys, one of India’s largest IT companies.
Infosys, in particular, has disappointed investors with its sales forecast for the current year. As a result, the company’s stock value fell to a 52-week low before recovering slightly. Analysts have given mixed recommendations on IT stocks, with some advising buying Infosys stocks at current levels, while others have cut the one-year price target.
Now the big question is, Should you buy or sell Infosys and other IT stocks?
•The Downfall:
•The Reason -The disappointing numbers by Infosys and TCS have had an impact on the entire IT sector, with the Nifty IT Index witnessing a drop in their value.
•Key Highlights of the Results -Net profit of Rs 6,128 crore in Q4 FY23,
– 7.7% YoY increase but below the expectations of Rs 6,550 crore.
– Rs 24,095 crore for FY23 up 9% YOY
– Revenue from operations increased 16% to Rs 37,441 crore,
– which is also below the poll of Rs 38,850 crore.
– Rs 146,767 crore (up 20.7%) for Fy 23
– Expects revenue growth of 4-7% for FY24.
-The Headcount growth – 29,219 employees,
-Down 46% from last year’s net addition of 54,396.
-The company’s headcount stands at 3,43,234 as of March 31, 2023.
-The attrition rate dropped to 20.9%
•Management Commentary
•Analyst Recommendations on Infosys and IT Stocks
Several analysts have given mixed recommendations on IT stocks, which could provide useful insights to investors.
Out of the 53 analysts surveyed by FactSet -10 analysts who are bearish on Infosys, while
-29 are bullish and
-14 are neutral
•IT Sector Facing Challenges
Growth for IT services companies has been democratic in the last two years, but a challenging environment will force organizations to focus on costs, leading to various cost take-out opportunities.
Many analysts believe that the IT sector may continue to face challenges for another couple of quarters due to
-clients in the US and Europe deferred discretionary spending.
-macro challenges,
-especially around banking, financial services, and insurance
•Strong Fundamentals but Growth is missing •Advice for Investors -Investors need to be careful when investing in the IT sector, especially during these challenging times.
-Analyst Sandip Sabharwal believes that the bad news from management on large IT stocks has been priced in, so investors should consider buying on dips of around 15-20%.
-Many analysts believe that ….
Read full article:
https://aceink.com/is-the-market-overreacting-to-infosys-52-week-low/
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