HCL Technologies dips on Q1 warning

The stock dipped 15% to Rs 835 on the National Stock Exchange in the early morning trade.

HCL Technologies has dipped 15% to Rs 835 on the National Stock Exchange (NSE) in the early morning trade after the information technology services company has given a pre-quarter guidance indicating that revenues to be reported in US dollar to have an adverse impact of 80bps on account of sharp depreciation of multiple currencies against US dollar.

The company said that for the quarter ended September 30, 2015 (Q1), the revenue growth is likely to be tepid on account of adverse currency impact, client specific issue and skewness in revenue growth due to transition timelines for complex engagements in infrastructure services.

During this quarter, revenues to be reported in US dollar would have an adverse impact of 80 basis points on account of a sharp depreciation of multiple currencies against the dollar.

It said some differences had arisen on programme objectives of one of its multi-million multi-year clients in the public services vertical, for which they were implementing a custom application development project.

“While discussions are on with the customer and we are in the process of disengagement, as a matter of prudence the company is considering reserving up to $20 million this quarter,” said the company.

“Though exact impact is not ascertained, as of now hence we are not changing our numbers and will wait for more clarity on the issue. However, we believe that the worst case scenario, the impact would be around 5-6% on EPS in FY2016,” Angel Broking said in a client note.

At 09:25 am, the stock was down 10% to Rs 886 on the NSE. A combined 3.54 million shares changed hands on the counter on the NSE and BSE.

The CNX Nifty was up 0.56% at 7,994 points.