The June quarter performance of IT’s bellwether Infosys turned out to be a damp squib. The stock plunged 8 per cent, post-results, not only on the back of a disappointing set of numbers for the June quarter, but also due to downward revision of the revenue guidance for 2016-17. From 11.5-13.5 per cent, the management cut its revenue growth guidance to 10.5-12 per cent.
The management cited slower ramp-ups in projects and delay in discretionary spends, as also post-Brexit uncertainties, for lowering its guidance. With a tepid 1.7 per cent sequential growth in revenues in the June quarter, meeting the revised guidance also appears challenging. However, there were a few positives. Infosys added three new clients in the $100 million plus bucket. The company’s new initiatives on automation and innovation have also started to pay off, helping margins. Moreover, unlike TCS, Infosys’ problems are all external and it might be able to tide over them better.