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Infosys 8 Months Low after Royal Bank of Scotland Scraps IT Deal


On Tuesday, 16th August 2016, Infosys Ltd shares slid as much as 3.35% after Infosys announced that it will slash about 3,000 employees, primarily in India for the next few months after the Royal Bank of Scotland (RBS) shelved the IT contract with the company.

On Tuesday, at 9:33 am Infosys Ltd shares were trading 2.05% down at Rs 1,041.50. And the script opened at Rs 1,042 and has touched a high and low of Rs 1,049.40 and Rs 1,027.60 in trade so far. Bombay Stock Exchange (BSE) Sensex was trading 8 points up at 28,160.43.

Last week the Royal Bank of Scotland (RBS) declared that it will no longer pursue its plan to distinct and list a new UK separate bank, Williams & Glyn (W&G).

Infosys 8 months low after RBS Scraps deal
Infosys 8 months low after RBS Scraps deal

On 30th June,2016, Infosys Ltd reported a combined a net profit of Rs 3,436 crore up 13.47% against Rs 3028 crore in the corresponding a year 2015.

In the last one year, shares of Infosys Ltd fell by 6.87 per cent to Rs 1063.30 on August 12. The scrip was trading at Rs 1141.75 on 12th August.

Profit of Infosys Ltd jumped by 16.92% year on year to Rs 16782 crore for the quarter under review against Rs 14354 crore in the same quarter last year (2015).

On the loss of IT deal from Royal Bank of Scotland (RBS), brokerage firm Emkay sees a revenue loss of $70-80 million for Infosys in FY17 and $150-200 million in FY18.

Emkay reported that, “This will be a further headwind to Infosys’s revised FY17 guidance of 10.5-12 percent c.c revenue growth (10.8-12.3 percent YoY in US$ terms) by 70-80 bps. We see risks to Infosys’s revenue and margin outlook given the increasingly negative commentary across players.”

Also the Brokerage firm reported that, “We continue to back our ‘Downside risks to modest growth hopes’ thesis on the sector with Q1FY17 results reflecting that the sector is headed for a rough FY17 and most likely H1FY18.”

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