Why did Narayan Murthy-owned Infosys’ stocks dip despite positive financial results?

Infosys. (Representative Picture)

Even though the net profit of IT services giant Infosys rose from Rs 6,506 billion to Rs 7,364 billion in the second quarter of the current financial year, its shares fell on the same day. The Narayan Murthy-owned company, which reported 13.2 percent year-on-year growth in the second quarter of fiscal 2025, failed to make headway in the stock market. Shares fell 1.8 per cent to an intraday low of Rs 1,447 in BSE trade on Friday. Contrary to Infosys’ performance, BSE Sensex rose 0.1 per cent to 83,530.

Infosys’ profit in 2025

Analysts point out that North America and Europe are going through a period of instability and volatility, making Infosys’ business uncertain. Approximately 85 percent of revenues come from these markets. Therefore, the appearance of the IT professional has weakened. Infosys’ dealmaking has been slower due to higher interest rates, delayed conversion projects and tighter client budgets. Even though the company owned by Narayan Murthy has seen a growth in its business, investors are skeptical about the company’s future endeavors.

(NR Narayanmurthy, President, Infosys)

Infosys share price

Even before financial results were announced, the company’s share prices had fallen due to the R18,000 Million buyback and GBP1.2 billion NHS contract. When the second quarter results did not meet investors’ expectations, profit taking took effect and prices were pushed down.

Infosys’ shares are trading at a forward price-to-earnings ratio of around 21-22x, so it does not increase valuation nor does it offer any upside. Compared to TCS, which has outperformed in terms of stability, and HCL Tech, which has shown positivity, Infosys looks weak. The IT specialist has failed to attract investors.