Infosys ADR’s post-Q3 earnings plunged more than 6% despite revenue’s above guidance

Infosys’ American Depositary Receipts (ADRs) fell 6.3%, even as the company reported better-than-estimated profit and revenue figures after market hours on Thursday.

Moreover, the IT services company today revised up its revenue guidance for the current financial year to 4.5%-5%.

Around 9:10 pm Indian time, Infosys ADR price was around $21.51, down $1.38 or 6% from Wednesday’s closing price.

Shares of Infosys also ended in the red on the BSE, trading at Rs. 23.60 or 1.21% down to Rs. 1926 was closed at 20.

India’s second largest IT services exporter today reported a consolidated net profit of Rs. 6,806 crore registered an 11% YoY growth which was Rs. 6,625 crore of Rs. ETNOW was more than a poll. Street Rs. 41,250 crore, the company’s revenue from operations rose 8% to Rs. 41,764 crores.

US markets were trading lower today with the Dow 30, currently down 119.70 points, or 0.28%, at 43,101.90. The S&P 500 was trading down 0.16% at 5,940.55 while the Nasdaq Composite was down 0.34% at 19,445.20.

Also Read: LTIMindtree Q3 Results: Cons PAT down 7% YoY to Rs. 1,085 crore, a 7% increase in revenue

Earlier today, the Bengaluru-based company reported strong constant currency revenue growth of 6.1%, compared to a quarter-on-quarter growth of 1.7%.

Operating profit during the third quarter rose 12% YoY to Rs. 8,912 crore, while operating margin increased by 80 basis points to 21.3%. Infosys also expects operating margins to be around 20-22% in FY25.

The company booked a large deal TCV (Total Contract Value) of $2.5 billion during the December quarter, up marginally from $2.4 billion in the previous September quarter.

Commenting on the Infosys results, Shaji Nair, Research Analyst, Capital Markets Strategy at Mire Asset Sharekhan, posted a healthy quarter in a seasonally weak quarter, beating brokerage estimates of 0.7% QoQ in CC.

“Infosys reported a healthy Q3FY25 despite Q3 seasonality and raised guidance for FY25 on the back of improving discretionary spending in financial services and retail and strong headcount growth. We believe the company is well-positioned to capture cost optimization and transformation opportunities given its strong pricing. is positioned to have domain knowledge and market-leading capabilities in the cloud with Cobalt and generative AI with Topaz,” said Nair.

Management is seeing an improvement in discretionary spending in financial services in Europe and retail and consumer in the US which bodes well for the company, the analyst said, which showed a marginal beat in EBIT margin at 21.3% compared to estimates of 21.1%.

Also Read: Axis Bank Q3 Results: PAT up 4% YoY to Rs. 6,304 crore, missed the estimate

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