IT stocks fall on poor guidance from Infosys

The terrible disappointment among analysts and investors about Infosys is very clear.

“I am disappointed that I did not short the stock,” Samir Arora of Helios Capital told CNBC-TV18. He also said that the stock continues to be a shorting idea.

The stock is continuing the decline, as the company management had nothing reassuring to offer.

At 10:41 am, the stock was down 18 percent at Rs 2,382.

[caption id=“attachment_696232” align=“alignleft” width=“380”] TCS was down 2.5 percent, Wipro 5 percent and HCL Technologies 2 percent. AFP[/caption]

“It is a real disaster for Infosys, primarily because their low guidance along with their fourth-quarter revenue which continues to drop,” Amar Mourya, an analyst with India Nivesh Ltd, was quoted saying in a Bloomberg report.

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Infosys’ poor show impacted other information technology shares as well as jittery investors turned bearish about the stock.

TCS was down 2.5 percent, Wipro 5 percent and HCL Technologies 2 percent. The BSE IT index was down 10 percent and the benchmark Sensex 1.44 percent.

Kotak Institutional Equities said termed the earnings and the guidance were “very very disappointing” and said it would impact all other stocks from the sector.

“FY2014 (estimated) revenue guidance is 6-10 percent year-on-year, including acquisition impact-extremely disappointing and bound to disappoint the Street and raise serious questions on recent optimism,” said it said in a flash note to clients.

“(The numbers)Validates our view that days of lazy extrapolation of last quarter results are (and should be) over for Indian IT,” the note added.