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Monday 12 October 2015

Why Infosys Shares Fell Even After Good Q2 Result : 12 Oct 2015

Infosys announced good results that beat market expectations. The stock, however, fell on the quarterly results numbers, declining as much by 5 per cent at one time before recovering a bit. The reason for the market reaction is fairly simple. The turnaround story is still a work in progress. Negatives like the CFO quitting, the company still battling 14.1 per cent attrition, and failure of the company to revise its growth projections in spite of the first half of the year being good, the market believes are signals that the turnaround story still requires substantial work. The onetime bellwether for the sector has seen some good set of numbers over the past couple of quarters, under the new leadership led by CEO and MD Vishal Sikka, the first non-promoter in the company's history to hold that office. Improved operational efficiencies including higher utilisation has meant that operating margins have gone up by a substantial 150 basis points in this quarter (that is about 1.5 per cent). The company also announced new total contract value wins of close to a billion dollars in this quarter. However, the third quarter usually is 'soft' for most services companies given the lower number of working days in this quarter. The markets seem to be factoring in that Infosys stock has also run up quite a bit - about 44 per cent - since Sikka took charge in August 2014. Compared to Infosys's shares run-up, TCS has gone up just 4.5 per cent and Wipro by 10.5 per cent in the same period. Now, Infosys's results and numbers need to catch up with the rise on the bourses.


Parag Patil is a technical analyst and trading system designer with stock excel programmer. I hope the articles and live chart of nse future and mcx on this Website will be as helpful and profitable to you . I try to update and post new articles tips everyday. My motto is to encourage the traders, so that they should able to understand the technique views behind the moment of stocks. I have deeply analyzed with many technical indicator with parameter and added to my amibroker afl. And even taken backtest report which is never being implemented. Any of the analyst expect me. Seeing all this you may understand that my views is more technical than commercial. If you are profited by my views I fill happy.

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