HCL Technologies shares slid as much as 15 per cent in the early trade on Thursday after the company gave a weak pre-quarter guidance for the first quarter ended September 2016 (Photo: Reuters)
HCL Technologies shares slid as much as 15 per cent in the early trade on Thursday after the company gave a weak pre-quarter guidance for the first quarter ended September 2016 (1QFY2016), which indicated that revenues to be reported in US dollar will have an adverse impact of 80 basis points on account of sharp depreciation of multiple currencies against US dollar. The IT major follows July-June as the financial year.
At 9.31 am, shares of HCL Technologies were trading 9.44 per cent down at Rs 889.45. It opened at Rs 915 and had touched a high and low of Rs 915 and 837.20, in trade so far. Sensex was up 0.87 per cent at 26,381.78.
The company expects tepid revenue growth in the first quarter on account of – adverse currency impact, a client specific issue and skewness in revenue growth due to transition timelines for complex engagements in infrastructure services.
In one of the multi-million custom application development project being executed for one of the customers, certain differences have risen with the customer. The company reserved upto $20mn as a matter of prudence.
Sarabjit Kour Nangra, VP research, IT, Angel Broking, said, “These factors will have a significant impact on the overall performance of the company in 1QFY2016. Though currency is a quarterly impact, the client specific issues can have an impact for the FY2016 numbers. Since the exact impact is not ascertained as of now we are not changing our numbers and will wait for more clarity on the issue. However, we believe in the worst case scenario, the impact would be around 5-6 per cent on EPS in the ongoing financial year. We currently maintain our ‘BUY’ rating with a price target of Rs 1,132.”
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