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Infosys ADRS Slide 6% After Revenue Growth Guidance Cut



 

On Thursday, Infosys (NS:INFY)’ American Depository Receipts (ADRs) witnessed a 6% drop following the company’s decision to cut its revenue growth guidance. The software giant attributed this adjustment to reduced discretionary spending and an economic slowdown in developed markets.

According to InvestingPro data, Infosys’ market cap stands at a robust 121.12 billion USD, indicating a strong position in the market despite the recent drop in ADRs. The P/E ratio of the company is relatively low at 14.35, suggesting that the shares are undervalued compared to the company’s earnings.

Despite the downward revision, Infosys’ constant currency revenue growth guidance remains within the 1.0-2.5% range. This comes alongside record deal wins for the company, including total contract value (TCV) deals worth $7.7 billion. The company’s revenue for the last twelve months (LTM2023.Q2) was an impressive 66431.69 million USD, marking an 8.18% growth, as per InvestingPro data.

In addition to these developments, Infosys reported robust performance for both the September quarter and the past six months. The firm has maintained an operating margin of 21.2%, backed by a profitability improvement plan. InvestingPro data also shows that Infosys has a Gross Profit Margin of 41.02%, indicating a healthy level of profitability.

In terms of financial performance, Infosys exceeded ETNow poll predictions with a consolidated net profit rise of 3% year-on-year to Rs 6,212 crore. The company saw nearly a 7% increase in revenue amounting to Rs 38,994 crore.

InvestingPro Tips suggests that Infosys operates with a high return on assets, standing at 10.94% as of LTM2023.Q2, and has been profitable over the last twelve months. These insights, coupled with the company’s consistent performance, suggest a promising outlook for the firm. For more such insights, you can explore InvestingPro’s additional tips, which include a comprehensive analysis of various financial metrics.

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