India's HCLTech tumbles nearly 10% after Q3 revenue miss


FILE PHOTO: Employees of HCLTech walk inside the office premises on the outskirts of Lucknow, India, March 20, 2024. REUTERS/Pawan Kumar/File Photo

(Reuters) -Shares of HCLTech plunged nearly 10% on Tuesday, set for their worst session since September 2015, after India's No. 3 software services provider missed quarterly revenue estimates and raised only the lower end of its full-year sales outlook.

HCLTech was the top loser on the blue-chip Nifty 50 index on the day, which gained 0.5% after a 1.5% fall in the previous session.

At least 11 brokerages cut ratings on the stock after HCLTech reported a 5.1% rise in consolidated revenue to 298.9 billion rupees ($3.45 billion), missing analysts' expectations of 300.68 billion rupees due to underperformance in its software business.

Four brokerages also cut their price targets on the shares, data compiled by LSEG showed.

The sharp fall in the share price comes despite HCLTech CEO C Vijayakumar's forecast of an improving demand environment in 2025, in line with comments by larger peer Tata Consultancy Services.

HCLTech also revised its revenue growth for fiscal year 2025 to 4.5%-5% from 3.5%-5% earlier, on account of acquisitions.

Goldman Sachs said that the mid-point of HCLTech's revenue guidance was marginally below its expectation, "a function of weaker software segment revenue growth and gradual ramp-up of some discretionary deals".

"Apart from the miss in revenue, fourth-quarter commentary is not as encouraging as the Street was expecting and no increase in the top end of the revenue guidance added to the decline," said Sanjeev Hota, vice president and head of research at Mirae Asset Sharekhan.

HCLTech's shares had outperformed their peers in 2024, climbing 31% compared to a 22% rise in the Nifty IT index.

Rivals Tata Consultancy Services and Infosys rose 8.5% and 22.5%, respectively, in 2024.

These stocks were down 0.31% and 0.61%, respectively, on the day.

($1 = 86.5160 Indian rupees)

(Reporting by Manvi Pant in Bengaluru; Editing by Mrigank Dhaniwala)

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Next In Tech News

Mobile phone-owning 13 to 16-year-olds increasingly targeted by scams
AI helps some workers but hinders those with skill, know-how – study
TikTok to give package kits on its website for US Android users to download app
Human artists could disappear if copyright not protected from AI
Start your own blog for more space and freedom to share your material
Meta prepares for layoffs on Monday -internal memo
Coinbase must face customer lawsuit in New York
Iliad to invest $3.1 billion to boost AI infrastructure in Europe
OpenAI's Altman envisions Stargate-like programme for Europe
Motorola refused permission to appeal UK emergency services network case

Others Also Read