RIYADH: Indian stocks on Monday retreated from their longest winning streak since last October, as Reliance Industries slipped after a weaker-than-expected earnings report, though a strong performance at private lender ICICI Bank limited the losses. .
The NSE Nifty 50 index was down 0.19 per cent at 16,687.8, as of 0354 GMT, while the S&P BSE was down 0.2 per cent at 55,958.76.
Last week, the indices rose more than 4 per cent each in their best performance since February 2021.
India’s most valuable company, Reliance, fell 3.4 per cent in its biggest intraday percentage drop in more than three weeks, with its first-quarter profit missing estimates on cost escalation.
Infosys misses profit forecast due to cost escalation
India’s Infosys Ltd on Sunday reported June-quarter profit that missed estimates, hurt by higher employee expenses, but the information technology services company raised its annual revenue outlook, citing a strong demand outlook.
Infosys’ big IT rival Tata Consultancy Services and smaller rivals like HCL Technologies and Wipro have also seen their margins fall as they grapple with a high sector-wide talent churn and are trying to retain employees.
Total expenses jumped over 29 per cent, while Infosys’ operating margin for the June quarter declined 3.6 per cent year-on-year to 20.1 per cent. The company retained its operating margin guidance for the full year at 23 per cent from 21 per cent.
Infosys Chief Financial Officer Nilanjan Roy said in a statement that the company is investing in talent through revision in hiring and competitive compensation, which will impact margins in the immediate term.
However, Bengaluru-based Infosys expects revenue growth of 14 per cent to 16 per cent in March fiscal, slightly higher than its outlook of 13 per cent to 15 per cent forecast in April.
“We see good volume growth, a good pipeline of large deals and this gives us confidence to increase revenue guidance,” CEO Salil Parekh said in a media call.
Infosys saw its big deal signing drop nearly 35 percent to $1.7 billion, while gross customer growth during the quarter fell to 106 from 113 a year ago
But Parekh said the company is seeing a good trend with large customers.
Consolidated net profit for Infosys rose 3.2 percent to Rs 53.60 billion ($12.5 million), according to Refinitiv data, but missed analysts’ estimates of Rs 56.26 billion.
April-June quarterly earnings reports have started on a weak note for Indian IT services companies, with TCS, HCL Technologies and Wipro also missing their first quarter profit estimates.
Revenue from Infosys operations grew 24 per cent to Rs 344.70 billion.
(with input from Reuters)