HCL Technologies shares sank 15 per cent on Thursday
following the revenue warning it issued for its first quarter
(July-September 2015). HCL Tech will report Q1 results in the fourth
week of October.
"During this quarter, revenues to be reported in US dollar would have an adverse impact of 80 basis points on account of sharp depreciation of multiple currencies against US dollar," HCL Tech said in a statement to the Bombay Stock Exchange.
HCL Tech was the top Nifty loser and underperformed the broader IT sub-index on the Bombay Stock Exchange, which traded 0.1 per cent lower.
"HCL Tech's revenue growth is likely to be 0 per cent to 1 per cent QoQ in reported US dollar terms for the July-September quarter of 2015. This is against the 3 per cent we had factored in earlier," said Girish Pai of domestic brokerage Nirmal Bang Securities.
HCL Tech, India's fourth largest outsourcer, based its tepid revenue growth projection on a) adverse currency impact, b) revenue loss of $20 million to take care of disengagement with a client, and c) 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 arisen on with the customer," HCL Tech said. The company reserved up to $20 million as a matter of prudence.
"While the company has little control over cross currency issues, we believe the other two factors are probably more serious and require a greater scrutiny," Mr Pai said.
Nirmal Bang termed the revenue warning as an "aberration" and retained its "accumulate" rating on HCL Tech. However, it cut its target price on the stock from Rs 1,008 to Rs 991.
"During this quarter, revenues to be reported in US dollar would have an adverse impact of 80 basis points on account of sharp depreciation of multiple currencies against US dollar," HCL Tech said in a statement to the Bombay Stock Exchange.
HCL Tech was the top Nifty loser and underperformed the broader IT sub-index on the Bombay Stock Exchange, which traded 0.1 per cent lower.
"HCL Tech's revenue growth is likely to be 0 per cent to 1 per cent QoQ in reported US dollar terms for the July-September quarter of 2015. This is against the 3 per cent we had factored in earlier," said Girish Pai of domestic brokerage Nirmal Bang Securities.
HCL Tech, India's fourth largest outsourcer, based its tepid revenue growth projection on a) adverse currency impact, b) revenue loss of $20 million to take care of disengagement with a client, and c) 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 arisen on with the customer," HCL Tech said. The company reserved up to $20 million as a matter of prudence.
"While the company has little control over cross currency issues, we believe the other two factors are probably more serious and require a greater scrutiny," Mr Pai said.
Nirmal Bang termed the revenue warning as an "aberration" and retained its "accumulate" rating on HCL Tech. However, it cut its target price on the stock from Rs 1,008 to Rs 991.
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