“Infosys Ltd. (INFO), India’s second- largest software services exporter, plunged the most in 10 years in Mumbai trading after forecasting annual sales growth as slow as half the pace analysts estimated.
Infosys shares plummeted 21 percent to 2,296.65 rupees at the close, the biggest decline since April 2003. Bigger competitor Tata Consultancy Services Ltd. (TCS), which will report earnings on April 17, fell 1.6 percent and Wipro Ltd. (WPRO) dropped 4.8 percent. Infosys was the biggest loser on the S&P BSE Sensex, dragging the benchmark 1.6 percent lower.
An uneven global recovery poses a challenge for the information-technology services industry, Chief Executive Officer S.D. Shibulal said after the European Central Bank last month cut growth and inflation forecasts. Infosys said it charged customers less last quarter, underscoring concerns about the ability of service providers to raise prices.
“It is a real disaster for Infosys, primarily because of their low guidance along with their fourth-quarter revenue,” said Amar Mourya, a Mumbai-based analyst at India Nivesh Ltd. “Their confidence seems to be shaken with such a broad forecast, and visibility looks poor.”
The company, based in Bangalore, expects revenue to increase 6 percent to 10 percent in the year ending March 2014, it said. Analysts estimated sales at 454.7 billion rupees ($8.3 billion), up 12.7 percent, based on the average of 66 estimates compiled by Bloomberg. It didn’t provide an earnings per share forecast as the “unknowns are substantial,” Shibulal said in a conference call with analysts.
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