CNX IT index drops 3%; Infosys hits three-month low

Infosys,Tech Mahindra, Rolta India, Polaris Consulting, Tata Elxsi and KPIT Techno were down 4%-9% on the NSE.

Shares of information technology (IT) were under pressure after Infosys reported disappointing set of numbers for the quarter ended March 2015 (Q4).

Infosys, Tech Mahindra, Rolta India, Polaris Consulting & Services, Tata Elxsi and KPIT Technologies have dipped between 4%-9% on the National Stock Exchange (NSE).

At 1459 hours, CNX IT index dipped nearly 3% or 304 points at 11,147 compared with 1.2% fall in the CNX Nifty. IT index hit a low of 11,107 post Infosys results, fallen 416 points from its intra-day high of 11,523.

Shares of Infosys has dipped 6% to Rs 1,993, its lowest level since January 2015 on the NSE, after the company reported 4.7% quarter on quarter fall in its consolidated net profit at Rs 3,097 crore in March 2015 quarter. It had reported a net profit of Rs 3,250 crore for the quarter ended December, 2014.

Revenues too declined by 2.8% at Rs 13,411 crore on sequential basis, Infosys said in a statement.

The company said FY 16 revenues expected to grow between 10%-12% in constant currency terms.

"Services growth in the fourth quarter was lower than we expected, though we saw healthy growth in Finacle and our Edge suite. Pricing continues to be under pressure due to increasing commoditization in the traditional outsourcing business, requiring us to ramp up productivity through automation, and enhance our differentiation in large engagements”, said U.B. Pravin Rao, COO, Infosys.

Meanwhile, the board of directors of Infosys has recommended a bonus issue of one equity share for every equity share held and a final dividend of Rs 29.50 per equity share.