Stock crashes 9.6% as numbers disappoint | india | Hindustan Times
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Stock crashes 9.6% as numbers disappoint

The Infosys stock fell sharply by 317 points, or 9.6%, witnessing its highest intra-day fall in almost two years to close at Rs 2,988.8, following a below-than-expected Q4 result and weak earnings guidance for fiscal year 2011-12 as well as management restructuring.

india Updated: Apr 15, 2011 23:53 IST
HT Correspondent

The Infosys stock fell sharply by 317 points, or 9.6%, witnessing its highest intra-day fall in almost two years to close at Rs 2,988.8, following a below-than-expected Q4 result and weak earnings guidance for fiscal year 2011-12 as well as management restructuring.

The infotech major announced a 22% year-on-year jump in revenues at Rs 7,250 crore for the quarter ended March 2011 but a muted 13.6% growth in net profit at R1,818 crore for January-March quarter.

For the full year ended March 2011, the company announced a 20.9% rise in revenues at R27,501 crore and a 9.7% net profit growth at Rs 6,823 crore.

While markets expected a better performance from Infosys, sentiments got further dampened by the outlook for fiscal year 2011-12. The company has projected a revenue growth of up to 17.3% at Rs 32,270.0 crore but an earnings per share (EPS) in the range of Rs 128.2, a year-on-year growth of 7.3%, which is much below market estimates.

“The guidance indicates that pressure on margins will continue and there will be good topline growth but minimal profit growth,” said Gaurav Dua, research head, Sharekhan.

“The markets estimate of EPS was at around Rs 155 and the share price fall today has factored in the reduction in earnings estimate.”

With change in leadership in the near future and a couple of resignations, experts feel that the market will adopt the wait-and-watch policy to see how the new management performs before the stock moves upward.