HCL Tech down on earning warning
HCL Tech is amongst the big losers of the day currently. From yesterday’s close of Rs.982.15, it opened much lower at Rs.915, which was actually its high point and went down to an intra day low of Rs.837.20. It remains some 10% down.
The company issued its pre-earnings briefing for Q1 ended 30th Sept 2015 and the picture does not look too optimistic. It stated that its revenue growth is likely to be tepid on account of adverse currency impact, a client specific issue and skewness in revenue growth due to transition timelines for complex engagements particularly in infrastructure services. The company will unveil Q1 September 2015 results in the fourth week of October 2015.
During this quarter, the company said that revenues to be reported in US dollar would have an adverse impact of 80 basis points (bps) on account of sharp depreciation of multiple currencies against the US dollar.
The company said that in one of the multi-million multi-year custom application development project being executed for one of the customers in the Public Services vertical by HCL Technologies, certain differences have arisen with reference to the program objectives. While the discussions are on with the customer and the firm is in the process of disengagement, as a matter of prudence the company is considering reserving up to $20 million this quarter.