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India software firm Infosys trims dollar revenue forecast

India’s second largest IT firm Infosys trimmed its dollar revenue forecast for the current fiscal year which triggered a massive sell-off in the IT and TECk stocks.

IT index plunged 2.02 per cent, while TECk took a hit of nearly 1.85 per cent. Its shares erasing all its early gains ended 3.88 per cent down after it cut its dollar revenue guidance for the financial year 2016 despite posting 9.8 per cent rise in net profit to Rs 3,398 crore in the July-September period on a sequential basis, while revenue stood at Rs 15,635 crore.

In a surprise move, the company’s chief financial officer Rajiv Bansal announced his resignation; he will be replaced by senior executive MD Ranganath.

“There has been Infosys-led falls but Infosys earnings cannot be extrapolated to the entire earnings season,” said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance Co.

The analysts said Infosys has been an outperformer in the IT space, so Monday’s correction should be linked to the fact that the stock had run up sharply.

“The commentary was very positive… there is no reason why one should not be positive about Infosys,” said Manish Sonthalia of Motilal Oswal.

However the shares fell as much as 5 per cent after earlier hitting a record high. As of 11.20 a.m., Infosys shares were down 2.5 per cent at Rs 1,138 against flat trade in broader markets.