India’s second-largest software services exporter Infosys Ltd cut its fiscal-year revenue growth target for the second time in three months on an uncertain business outlook, sending its shares tumbling more than 5 percent.
Reporting a 6.1 percent rise in second-quarter net profit, Infosys said on Friday it now expected revenue to grow between 8 percent and 9 percent in constant currency terms in the fiscal year to March 31, 2017. Its previous revenue growth target, issued in July, was 10.5-12 percent, already lowered from the up to 13.5 percent it said it expected in April.India’s more-than-$150 billion software services sector depends on North America and Europe for the majority of its revenue. The impending U.S. presidential election and the implications of Britain’s ‘Brexit‘ move to exit the European Union have both weighed on spending by western clients.
Infosys had warned in August it was seeing some “softness” in business after the June Brexit vote in Britain.
Chief Executive Vishal Sikka said in a statement on Friday the revision took into consideration “our performance in first half of the year and the near-term uncertain business outlook”.
After falling as much as 5.3 percent after the guidance cut was announced, Infosys shares were trading 2.6 percent down at 0453 GMT in a Mumbai market that was little changed.
For its fiscal second quarter to Sept. 30, its consolidated net profit rose 6.1 percent from a year earlier to 36.06 billion rupees ($541.51 million), ahead of analysts’ estimates of 35.26 billion rupees. Revenue rose 10.7 percent to 173.1 billion rupees.The company said on Friday it added 78 clients during the three months to September, taking its total number of active clients to 1,136.
($1 = 66.5919 Indian rupees)