While announcing the company’s second quarter results in October, the country’s third largest IT exporter raised its revenue growth guidance for FY23. HCL Tech pegged 13.5-14.5% growth in revenue in constant currency against 12-14% projected earlier.
“Some of the macros–like furloughs and drop in discretionary spend in tech, telecom and other verticals–is a little bit more than what we expected at the beginning of the quarter,” said Vijayakumar
“We think it’s a December-phenomenon because of the furloughs…given the narrow band and macro feedback we have today, we will be at the lower-ends of our guidance for overall level at 13.5%-14.5% and 16-17% growth in cc in services business,” he added.
HCL Tech management’s comments sent the investors into a tizzy as the stock witnessed its biggest intraday fall in six months on Friday.
“With macro conditions deteriorating, positive news on this front is highly unlikely, we believe. HCL Tech also highlighted that there is greater level of vendor consolidation underway right now than in the recent past not only due to challenging macro circumstances, but also due to weeding out of a few global top 10 service providers based on risks associated with them,” Nirmal Bang’s Head of Research Girish Pai said.
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