Updated December 26th, 2023 at 09:57 IST
Infosys shares fall on termination of $1.5 billion AI agreement
The deal, initially signed in September 2023, was a 15-year agreement aimed at leveraging Infosys' platforms and artificial intelligence (AI) solutions.
Shares of Infosys fell as much as to 2.6 per cent to hit an intraday low of Rs 1,522 on Tuesday after the IT company on Saturday said that an undisclosed global entity, previously engaged in a $1.5 billion deal focused on artificial intelligence solutions, decided to terminate its Memorandum of Understanding (MoU) with Infosys.
The deal, initially signed in September 2023, was a 15-year agreement aimed at leveraging Infosys' platforms and artificial intelligence (AI) solutions to enhance digital experiences and provide business operation services.
The termination comes amid a challenging period for IT and tech companies globally, grappling with uncertainties and industry-wide challenges. The development follows the resignation of Nilanjan Roy, the company's former Chief Financial Officer, just two weeks ago.
Infosys had seen a gain of approximately 7 per cent during the quarter and a 1.8 per cent increase year-to-date, making the termination of the significant AI deal a notable event for the company and its stakeholders. The news reflects the broader landscape of uncertainties facing the technology sector, impacting strategic partnerships and business arrangements.
Infosys, the country's second largest IT services company, reported net profit of Rs 6,212 crore in the second quarter of current financial year, marking an increase 4.5 per cent from Rs 5,945 crore in the previous quarter. The company's profit rose after it won large deals worth $7.7 billion with 48 per cent new deal wins during the second quarter.
Infosys revenue from operations rose 2.8 per cent to Rs 38,994 crore. In dollar terms, its revenue rose 2.3 per cent sequentially to $4,718 million.
The Bengaluru-based company forecast full-year revenue growth at 1-2.5 per cent on a constant currency basis, compared to its prior view of 1-3.5 per cent.
As of 9:55 am, Infosys shares traded 1.73 per cent lower at Rs 1,535.
Published December 26th, 2023 at 09:57 IST