Technology bellweather Infosys expects revenue in financial year 2024 to grow between 4-7 percent. The street expected the number to be between 6-8 percent on a constant currency basis.

Infosys reported a 3.2 percent decline in constant currency revenue (adjusted for exchange rate fluctuations), which is the worst in at least a decade. Rival TCS on Wednesday had reported constant currency revenue growth which was also at an 11-quarter low. Even during the Covid-19 quarter of April-June 2020, revenue decline in constant currency terms stood at 0.8 percent.

For the full year, the company reported constant currency revenue growth of 15.4 percent, which also missed the company's guidance of 16-16.5 percent. Infosys began the year with a 13-15 percent growth projection, and went on to increase guidance in every quarter thereafter.

For constant currency revenue growth, consensus expectations were between 0.4-0.45 percent. While Morgan Stanley expected that figure to be -0.1 percent, Antique Stock Broking projected a 1.1 percent growth number.

Also Read: Infosys Q4 Results Live: US-listed shares down 4% pre-market after guidance misses estimates

The Bengaluru-based technology services company reported US Dollar revenue decline of 2.2 percent quarter-on-quarter. A CNBC-TV18 poll had pegged the figure at 1.33 percent. In rupee terms, revenue declined by 2.3 percent sequentially to Rs 37,441 crore.

"Revenue instead of growth has declined and that is very surprising. Europe has done far better for the company than expectations, so problem is coming from North America. There is also a sizable decline in contribution from BFSI segment," Mitul Shah of Reliance Securities said.

Operating profit or EBIT for the period declined by 4.3 percent from the December quarter to Rs 7,877 crore, while EBIT margin stood at 21 percent, compared to a CNBC-TV18 poll of 21.56 percent.

For the full year, the company expects EBIT margin to be between 20-22 percent. A CNBC-TV18 poll expected the figure to be between 21-23 percent. EBIT margin for the year als stood at 21 percent, which is at the lower end of the company's 21-22 percent projection.

Total deal wins during the quarter stood at $2.1 billion, which was the lowest in three quarters. Deal wins during the December quarter stood at $3.3 billion.

Infosys shares listed in the US in the form of American Depository Reciepts (ADRs) are currently down 6 percent in pre-market trading.

Also Read: Infosys employee headcount drops by 3,611 in Q4, attrition moderates for third consecutive quarter

MD & CEO Salil Parekh said that there were unplanned ramp downs seen in some of the company's clients and that the delays in decision-making resulted in lower volumes. Parekh also said that there has been some stabilisation of the environment in March.

Parekh further said that unplanned ramp down in telecom, hi-tech, and retail segments, and within the financial segment, it came in the asset management and investment banking.

"Earlier the IT company managements had highlighted that January was reasonably strong but February and March had deteriorated. So if we assume that similar trend continues for next few months then certainly next quarter would see sizable deterioration on a quarter on quarter basis from hereon. So that is a real challenge for next two quarters for the IT sector,:" Reliance's Shah said.

Infosys has also been in the news due to the exit of some of the top management. S Ravikumar quit to join Cognizant, while Mohit Joshi resigned and will take over the reins at Tech Mahindra.

Answering queries on this, MD & CEO Parekh said that the company has a strong leadership team and that leaders within the company will step up.

The company has also declared a dividend of Rs 17.5 for the quarter, taking the full year dividend to Rs 34. For the full year, Infosys has announced dividend worth Rs 14,200 crore. It also completed its open market share buyback on February 13, at an average price of Rs 1,539 per share, compared to the maximum buyback price of Rs 1,850 apiece.

Infosys shares in India ended as the worst performer on the Nifty 50 index, ending over 3 percent lower. The stock is 2.5-3 percent away from its 52-week low of Rs 1,355.

First Published:Apr 13, 2023 4:20 PM IST