Notably, the company, for the first time, suspended its revenue and margin guidance due to uncertainty emanating from Covid-19. According to Amit Chandra, analyst at HDFC Securities: “Not giving or suspending guidance shows greater business uncertainty.” How the deal-wins ramp up going ahead after the September 2020 quarter would be key,” he added.
Q4 results also indicate the quantum of pain Infosys
is witnessing due to the Covid-19 pandemic. Key geographies of North America and Europe, which account for around 85 per cent of Infosys’ revenues, grew between 5 per cent and 6.4 per cent YoY in reported terms, much lower than 9-10 per cent growth clocked in the December 2019 quarter. Among key business segments, financial services (31-32 per cent of revenues) grew at a lower rate of 3.5 per cent YoY compared to 5.3 per cent a quarter ago. Barring retail, all the other segments witnessed a deceleration in YoY growth in Q4.
Infosys' management said most key business segments would remain under pressure in the near term and the execution of deal wins would also be a concern. While long-term growth potential remains intact in areas, such as digital and cloud, it said the current crisis is different from the earlier financial crisis.
Some analysts thus expect Infosys’ revenues to decline between 4 per cent and 5 per cent sequentially in the June 2020 quarter.
Infosys’ American Depositary Receipt was down by 3 per cent in intra-day trades on the New York Stock Exchange, but recovered later. At 8.30 pm IST, it was 0.5 per cent down over the previous day's close.
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