Infosys Shares Drop 6% on Weak Q4; Bonus Issue Fails to Cheer Investors

Infosys, India's second largest IT outsourcer, on Friday reported a net profit of Rs 3,097 crore on sales of Rs 13,411 crore for the March quarter, missing Street estimates.

In dollar terms, Infosys revenues dropped by 0.4 per cent in constant currency during the fourth quarter, a big negative considering all its competitors had reported an uptick in dollar revenue growth. TCS had reported a 1.6 per cent growth in dollar revenues, HCL Tech grew at 2.7 per cent and Wipro posted a 1.2 per cent growth.

"I am disappointed that we could not do better in Q4 despite good performance in the first three quarters," said Vishal Sikka, CEO of Infosys.

Shares in Infosys dropped as much as 6 per cent tracking the decline in dollar revenues during the March quarter. (Read: IT Stocks Fall as Infosys Misses Q4 Estimates)

Infosys, however, said its revenues in dollar terms will grow between 10-12 per cent in constant currency during 2015-16 fiscal year. Infosys is the only IT company to give an annual sales outlook.

Sanjeev Hota of Sharekhan told NDTV that Infosys Q4 is a miss on revenue and profitability, but its guidance is better than expected.The company also announced a bonus issue in the ratio of 1:1 for shareholders.

This is the second time in less than six months that Infosys has announced a bonus issue. Infosys has also increased its dividend payout. The bonus issue and higher dividend payout will cheer Infosys investors, analysts said. (Read: Bonus Payouts, 25,000 Promotions Helped Contain Attrition, Says Infosys)