Infosys falls due to margin pressure; leverages Sensex fall

Infosys has free fallen on Thursday, trading at Rs. 1195 per share down by almost 3.48 per cent or Rs. 43 on an intra-day basis owing to comments by management related to pressure on margins.

As per media reports Infosys has warned of 200 bps Q1 margin cuts. The margin cuts expected are due to  rising visa costs and salary costs. The management was quick to suggest that the revenue guidance for the FY17 will be met. The margins have been under pressure due to commoditisation in the industry.  The industry faces concerns over increasing client spend on IT. 

Infosys has outperformed market over 1 year period and has generated 20 per cent returns for same period. On YTD basis the stock is up by almost 10.50 per cent. At Rs. 1195 per share the stock is trading above its 200-DMA indicating bullishness in the scrip. Infosys has contributed 97 points in Sensex downfall at the time of filing this report. Infosys has contributed to almost 60 per cent of the Sensex fall on Thursday, on an intra-day basis. 

The broader markets are trading down on Thursday with Sensex trading at 26,858 levels down by 161 points or 0.60 per cent on an intra day basis.