The Chairman of Infosys Ltd, which is currently the second-largest software exporter by sales in India – Mr. N.R. Narayana Murthy – informed the company investors that its annual sales growth is expected to be at the lower end of the previous forecasts, and the companys shares have been steadily going down headed to their biggest decline in almost a year.
Yesterday Infosys Ltd warned that its annual sales growth for the current fiscal year may be near the lower end of its initial projections due to the fact that some of the companys customers are reducing the money spent on technology. The company had expected revenue growth estimated to between 11.5% and 12% for the current fiscal year. In addition, the revenue announced for the previous fiscal year through March 31st amounted to 7.4 billion dollars.
As reported by Bloomberg, at a meeting with investors, which was organized by Barclays Plc, Mr. N.R. Narayana Murthy said: “We are not very happy with our performance over the last two years. The second matter of concern for us has been the coming down of our operating margin.”
The Chief Executive Officer S.D. Shibulal was also present at the meeting. His comment was cited by the Wall Street Journal: “At the ground level, some of the clients have seen a slowdown across various industry verticals, leading to unanticipated project ramp-downs.”
Mr. S.D. Shibulal added that the customers of the company are currently dealing with “spending pressure”. He also shared: “Many of the factors that have led to the recent slowdown will continue to impact client spending at least in the initial part of the fiscal year 2015.”
Citigroup released a research note on Wednesday, saying that the recent performance of Infosys suggests “company-specific challenges”.
Infosys Ltd plunged 7.39% by 7:00 GMT in Mumbai to trade at 3 400 rupees, marking a one-year change of +18.96% and headed for its worst decline since April 12th 2013. The company is valued at 1.96 trillion INR. According to the Financial Times, the 55 analysts offering 12-month price targets for Infosys Ltd have a median target of 4,000 INR, with a high estimate of 4,800 INR and a low estimate of 2,100 INR. The median estimate represents a 8.95% increase from the previous close of 3,671.3 rupees.
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