Infosys Shares Drop 6%, Impacting Murthy Family Wealth by ₹1,850 Crore
Shares of Infosys Ltd, the second-largest IT firm in India, witnessed a sharp 5.89% decline, hitting a low of ₹1,812.70 on the Bombay Stock Exchange (BSE). This drop not only affected peer IT counters and the broader indices such as Sensex and Nifty but also had a significant impact on the fortunes of the Murthy family, one of Infosys’ primary stakeholders.
Murthy Family Stake in Infosys
The Murthy family, including co-founder NR Narayana Murthy, his wife Sudha N Murty, their son Rohan Murty, daughter Akshata Murty, and grandson Ekagrah Rohan Murty, collectively owned a 4.02% stake in Infosys as of the September quarter.
This stake was valued at approximately ₹30,300 crore after Friday’s stock market rout, compared to ₹32,152 crore the day before – a notional loss of ₹1,850 crore.
Breakdown of Family Holdings
- Narayana Murthy: 0.40% stake
- Sudha Murty: 0.92% stake
- Rohan Murty: 1.62% stake
- Akshata Murty: 1.04% stake
- Ekagrah Murty: 0.04% stake
Despite the strong Q3 results from Infosys, the market sentiment remained negative, dragging down the stock and eroding significant wealth for the Murthy family.
Q3 Results Beat Expectations but Market Concerns Persist
Infosys’ Q3 FY25 results exceeded expectations in terms of headline numbers. Revenue grew by 1.7% quarter-on-quarter (constant currency), driven by seasonal upticks and pass-through revenues.
However, underlying concerns regarding flat core business growth, reliance on inorganic contributions, and seasonal softness led to skepticism among investors and analysts.
Key Metrics from Q3 Results:
- Revenue Growth: 1.7% QoQ in constant currency
- Pass-Through Revenues: Contributed 1.5% to growth
- Inorganic Contribution: Added 0.2% to revenue
Brokerages, such as JM Financial, highlighted that Infosys’ sequential growth was heavily influenced by higher pass-through revenues and acquisitions rather than robust organic growth.
Brokerage Analysis: Uncertainty Looms Over FY26 Growth
Although Infosys upgraded its FY25 revenue guidance, the outlook for Q4 remains subdued. Many brokerages are cautious about upgrading the stock to a “Buy” rating due to concerns over de-growth and the absence of mega deal wins.
Key Concerns:
- Lack of Mega Deals: Large deals secured during Q3 did not meet expectations, casting doubt on Infosys’ ability to sustain double-digit growth in FY26.
- Seasonal Decline in Q4: Fewer working days and a drop in third-party revenue are likely to result in minus 2.2% to minus 0.2% QoQ growth in constant currency.
- Focus on Cost-Takeout Deals: Infosys management noted that client priorities continue to emphasize cost-saving deals rather than discretionary spending, particularly in BFSI and retail verticals.
Despite these headwinds, Infosys remains optimistic about a near-term recovery in discretionary spending and demand stabilization across sectors.
Impact on the IT Sector and Broader Market
Infosys’ sharp decline reverberated across the Indian IT sector, affecting other major players such as TCS, Wipro, and HCL Tech. The Nifty IT index, which tracks the performance of IT stocks, also fell significantly, trimming the six-month gains for the sector to 5.42%.
Broader Market Impact:
- Sensex and Nifty indices both experienced downward pressure due to Infosys’ weightage in these benchmarks.
- Investors remained cautious about IT stocks amid mixed global cues and a risk-off sentiment in the technology sector.
Murthy Family Wealth: A Notional Decline
The Murthy family’s wealth, tied to Infosys shares, saw a steep notional decline of ₹1,850 crore. Akshata Murty, the wife of former UK Prime Minister Rishi Sunak, alone held a stake valued at ₹7,475 crore, down from ₹7,925 crore on Thursday.
This substantial decline underscores how the performance of a single stock can significantly affect stakeholders with concentrated investments.
Investor Outlook: Is It Time to Buy Infosys?
While Infosys remains a bellwether stock in the Indian IT sector, analysts are adopting a wait-and-watch approach before issuing bullish recommendations.
Bullish Factors:
- Upgraded FY25 revenue guidance
- Strong Q3 headline numbers
- Long-term growth potential in key verticals
Bearish Factors:
- Uncertainty surrounding mega deal wins
- Seasonal and structural headwinds
- Limited client appetite for discretionary spending
For long-term investors, the current dip in Infosys’ share price could be an attractive buying opportunity. However, the lack of clarity on sustained growth drivers suggests caution in the short term.
Infosys’ 6% drop in share price has had a domino effect on the IT sector, benchmark indices, and the Murthy family’s net worth. While Q3 results offered strong headline numbers, underlying structural concerns and seasonal factors have weighed heavily on investor sentiment.
As Infosys navigates through these challenges, the focus remains on securing mega deals, addressing core business growth, and managing client priorities. Investors are advised to stay vigilant and consider both short-term risks and long-term opportunities in the IT sector.
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