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

Though the net profit of IT service major Infosys increased from Rs 6,506 crore to Rs 7,364 crore in the second quarter of the current financial year, it shares dipped on the same day. The Narayan Murthy-owned company that reported 13.2 per cent year-on-year (YoY) growth in Q2 of FY 2025, did not march ahead in the stock market. Its stocks dipped 1.8 per cent to an intraday low of Rs 1,447 in Friday's trade on the BSE. Contrary to Infosys' performance, the BSE Sensex was up 0.1 per cent at 83,530. 

Infosys profit 2025

Analysts point out that North America and Europe are going through a period of instability and volatility, making the business of Infosys uncertain. About 85 per cent of the revenue comes from these markets. So, the outlook of the IT major has gone weak. Infosys has a slower deal due to high interest rates, delayed transformation projects, and tighter client budgets. Though the Narayan Murthy-owned company has registered a growth in the business, the investors are skeptical of its future endeavors. 

(N. R. Narayanmurthy, Chairman, Infosys)

Infosys share price

Even before the financial results were declared, the stock prices of the company had dipped due to the Rs 18,000 crore buyback and the GBP 1.2 billion NHS contract. When the Q2 results did not meet the expectations of the investors, profit-taking kicked in, pushing the prices down. 

Infosys' shares do not add to the valuation, nor do they offer an edge, as they trade at a forward P/E of around 21-22x. When compared to TCS, which commands a premium for its stability, and HCL Tech, which has shown positivity, Infosys appears weak. The IT major failed to attract investors.