Infosys Ltd shares plunged almost 11 per cent to ₹1,238.25 a piece, the most intraday since March 2020, as concerns about demand for Indian IT services surfaced in the aftermath of US and European banks turmoil and recessionary fears.
In the past five years, the stock price of Infosys has gone up by 2.5 times. For instance, in April 2018, the stock was priced at 564, and in April 2023, it was priced at Rs1,388. After Infosys’ March quarter results, experts predicted that the stock price could go up to 1,540, which is 25% higher than the current price.
However, the shares started taking a dip as Infosys predicted that this fiscal year’s sales growth will only be between 4% and 7%, well below what analysts’ expected of a 10.7% growth, owing to lower client expenditure and an uncertain global market.
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The negative prediction provided by Infosys last week, along with an unfavorable quarterly report from competitor Tata Consultancy Services, has prompted fears in the IT sector. The bankruptcy of Silicon Valley Bank and Signature Bank is concerning for the industry since, according to Reuters statistics, the banking, financial, services, and insurance industries in the United States and Europe account for more than 25% of the sector’s income.
“Some of the macro challenges especially around banking, financial services and insurance (BFSI) has become bigger and that does mean project cancellations or delays in the deal decision cycle,” Apurva Prasad, vice president of institutional research, HDFC Securities told Reuters.