Shares of Infosys, India’s second-largest software services firm, witnessed a sharp fall of nearly 15% on Monday, wiping out Rs 73,060.65 crore from its market valuation. This came after the company reported lower-than-expected growth in the fourth-quarter net profit and gave a weak revenue growth guidance of 4-7% for FY24. The stock tumbled 12.21% to Rs 1,219, its 52-week low mark, on the BSE, while on the NSE, it fell 14.67% to Rs 1,185.30, hitting its 52-week low.

Infosys’ market valuation also declined by Rs 73,060.65 crore to Rs 5,08,219.35 crore. The company’s poor performance had an adverse impact on the benchmark indices Sensex and Nifty, with the former quoting 891.04 points or 1.47% lower at 59,539.96 in morning trade. Other IT firms such as Tech Mahindra, HCL Technologies, Tata Consultancy Services, and Wipro also faced heavy drubbing, with their shares falling in the range of 3-6%.

The worse-than-expected Q4 results from Infosys with only 4-7% revenue growth for FY24 will drag down IT stocks, impacting the Nifty, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. Infosys missed revenue guidance for FY23 hit by “unplanned project ramp downs and decision-making delays by some clients,” the company said. With global macroeconomic uncertainties looming, it has given a subdued 4-7% revenue growth forecast for FY24, with top management cautioning that “the environment remains uncertain.” Infosys had last given single-digit revenue guidance in FY19.

Infosys’ Q4 year-on-year growth was 8.8%, and the sequential decline was 3.2% in constant currency terms. Revenue rose 16% year-on-year in the fourth quarter of FY23 to Rs 37,441 crore but represented a decline of 2.3% when compared to the December 2022 quarter. The revenue growth in constant currency for FY23 came in at 15.4%, lower than the guidance. During the Q3 earnings announcement in January this year, Infosys had raised its FY23 revenue guidance to 16-16.5%, against the previously projected band of 15-16%.

In conclusion, Infosys’ latest report card has been disappointing, with the company’s poor performance being attributed to unplanned project ramp downs and decision-making delays by some clients. Its subdued revenue growth forecast for FY24 is a reflection of the uncertain business environment, and the adverse impact on the IT stocks will be felt across the market.