Infosys worst performer this month
R Chandrasekaran
India’s third biggest software service solutions provider Wipro turned a bad performer in April in the U.S. bourses. However, Infosys is the worst performer in the current month in the IT segment for lack of providing solid forecast.
The interest built up on these two stocks just before the announcement of their quarterly numbers has been completely wiped out. Investors were hoping for a better outlook after a solid December quarter results. But both failed to offer an upbeat forecast like the leader Tata Consultancy Services or the National Association of Software Service Companies or NASSCOM offered.
Though TCS is not listed in the U.S. stock exchanges, its performance cast shadow on its rival’s performance in the bourses. Cognizant Technology Solutions is another company listed in the American exchanges and is yet to announce its results. But all the stocks are trading down in April.
Wipro had lost 19.5 percent in April alone in U.S. bourses. Look at the way the stock has gained till March. In January, shares of Wipro advanced 8.11 percent over the December 2012 closing and edged up further to close February 9.59 percent higher than last year closing. At the end of first quarter, the stock gained 15.30 percent over December closing. However, the gains were totally wiped out in April following the company’s and Infosys’ uninspiring forecast. For the year-to-date, shares of Wipro closed 7.19 percent lower on Friday’s trading.
On the other hand, despite losing about 20 percent in one trading session on April 12, Infosys’ loss for the year-to-date is only 1.32 percent. The company’s stock was not favored by investors after its tepid outlook resulting in a loss of 22.57 percent in April alone.
Cognizant Technology Solutions, which is expected to announce its results soon, posted strong gains last year. However, for the current year, its stock is trading down by 8.22 percent after posting a loss of 11.5 percent in April alone.
The cause of worry for investors is the downbeat outlook. The U.S. has indicated an estimated $85 billion cut in the budget thus impacting companies’ spend on IT in the current year. Additionally, the visa issue is cutting down the margins as far as Infosys is concerned though Wipro managed to retain its operating margin.
While Wipro expects better times after July following an uninspiring forecast for June quarter, Infosys guided fiscal year revenue below the NASSCOM’s prediction of 12 – 14 percent. However, TCS indicated that its growth will exceed the trade body thus suggesting internal problems to be sorted out by the two companies.