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Shares of HCL Tech today slumped 7% to 1,028 on BSE after its management indicated FY23 growth to be at the lower end of the 13.5% to 14.5% band. It was the biggest loser among the 30 Sensex stocks. In comparison, Sensex was down 0.3%. 

Chief executive officer C Vijayakumar at company's investor day said: “In October, we had increased our guidance from 13.5% to 14.5%. We had certain assumptions which helped us to devise 16-17% services growth. We had assumed certain furloughs. But we are seeing a bit higher. BFSI is the segment which is little bit impacted by furloughs, followed by tech companies," he said.

Market veteran Sandip Sabharwal, the former head of equity at SBI MF, in a tweet said: “Small warnings have started. Will become bigger as we move into 2023. Avoid technology and export oriented sectors in general. You will get them cheaper over the next 6 months."

Infosys, Wipro and Tech Mahindra shares also struggled today, down between 1% and 3%. IT stocks have seen a sharp correction this year on fears of demand slowdown for IT services amid global macro uncertainties. The Nifty IT index is down 22% this year as compared to 7% rise in broader Nifty50 index.

HCL Tech had in October raised its revenue growth forecast to 13.5%-14.5% from 12%-14%, on a constant currency basis, citing strong order bookings and pipeline. Vijayakumar added that the company had a good pipeline which he expected to deliver "decent bookings" in the next quarter.

India's IT services industry was one of the top benefactors during the pandemic as several businesses rushed towards digitising infrastructures and adopted remote or hybrid working policies. In 2021, Nifty IT index had surged nearly 60%.

However, many top-tier IT firms have recently given cautious forecasts so far amid the economic uncertainty globally as global central banks tighten their monetary policies. TCS had earlier had said clients are taking longer to decide on bigger deals.

In a recent note domestic brokerage Emkay said: “Q3 sequential revenue-growth performance is expected to be impacted by furloughs, lesser number of working days, softness in select pockets, and delay in decision-making due to macro uncertainties. Companies have highlighted the slower decision-making by clients amid macro uncertainties which would weigh on discretionary spending and large-deal closures. The technology budget cycle may be elongated this year, due to prevailing macro uncertainties. This may weigh on the Q4 revenue growth trajectory." (With Agency Inputs)

 

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