Infosys falls 5% on EBIT margin miss in March quarter

Shares of Infosys dipped 5 per cent to Rs 714 on the BSE in early morning deal after the company reported a lower-than-expected EBIT (earnings before interest and tax) margin for the March 2019 quarter (Q4FY19) at 21.5 per cent. The EBIT margin declined 110bps quarter-on-quarter (QoQ), due to the negative impact of utilisation, ramp up of large deal, S&M (sales and marketing) expenses and localisation and rupee appreciation.

Analysts at Dolat Capital believe that higher sub-contracting cost, higher attrition, implied investment and localisation in the medium term will lead to margin pressure in FY20 for Infosys. “We expect Infosys to report margins towards the mid-point of its guidance in FY20,” they said.