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RIYADH: Indian shares retreated on Monday from their longest winning streak since last October, as Reliance Industries slid following a weaker than expected earnings report, although a strong performance in private lender ICICI Bank limited the losses.

The NSE Nifty 50 index was down 0.19 percent at 16,687.8, as of 0354 GMT, while the S&P BSE slipped 0.2 percent to 55,958.76. 

Last week, the indexes rose more than 4 percent each in their best performances since February 2021.

India’s most valuable company, Reliance, fell 3.4 percent in its biggest intraday percentage drop in more than three weeks, after its first-quarter profit missed estimates on a surge in costs.

Infosys misses profit estimates as costs surge

India’s Infosys Ltd. on Sunday reported June-quarter profit that missed estimates, hurt by higher employee expenses, but the information technology services company raised its annual revenue outlook, citing a strong demand outlook.

Infosys’ larger IT rival Tata Consultancy Services and also smaller rivals such as HCL Technologies and Wipro have seen their margins erode as they battle a higher sector-wide talent churn and try to retain employees.

Overall expenses surged more than 29 percent, while operating margins for Infosys for the June quarter came in at 20.1 percent, down 3.6 percent year-on-year. The company also retained its operating margin guidance for the full year at 21 percent to 23 percent.

The company was making investments in talent through hiring and competitive compensation revisions, which will impact margins in the immediate term, Nilanjan Roy, chief financial officer, Infosys said in a statement.

However, Bengaluru-based Infosys expects revenue growth of 14 percent to16 percent for the financial year to March, slightly up from its view of 13 percent to15 percent forecast in April.

“We see good volume growth, good pipeline of large deals and that gives us the confidence for increasing revenue guidance,” CEO Salil Parekh said in a media call.

Infosys saw its large deal signings dropping about 35 percent to $1.7 billion rupees, while gross addition of clients during the quarter dropped to 106 from 113 a year ago

But Parekh said the company was seeing good traction with large clients.

Consolidated net profit for Infosys rose 3.2 percent to 53.60 billion rupees ($12.5 million), but missed analysts’ estimates of 56.26 billion rupees, according to Refinitiv data.

The April-June quarterly earnings reports have started on a weaker note for Indian IT services companies, with TCS, HCL Technologies and Wipro also missing their first-quarter profit estimates.

Revenue from operations for Infosys jumped 24 percent to 344.70 billion rupees.

(With input from Reuters)