HCL Technologies extends fall post March quarter outlook

The stock dipped 3% at Rs 912, extending its Wednesday's 4% fall on the National Stock Exchange.

Shares of HCL Technologies has dipped 3% at Rs 912, extending its Wednesday’s 4% fall on the National Stock Exchange (NSE) after the company said it expects cross currency fluctuations to impact its revenues by 280 basis points (bps) in the third quarter (January-March 2015).

The stock has fallen 7% in past two trading sessions compared with 1.6% rise in the CNX Nifty and 1.6% decline in CNX IT sector index.

HCL Technologies which schedule to announce its Q3 earnings on April 21, said the revenues and EBIT (earnings before interest, tax) for the January-March 2015 (Q3) quarter to be reported in US Dollar would have adverse impact of around 280 bps and around 80 bps respectively, as US Dollar continued to strengthen against almost all global currencies, during the quarter.

However, in spite of the adverse impact of exchange rate movement as mentioned above, the HCL Technologies is confident of achieving EBIT in the range of around 21%-22% for this quarter.

Analysts at Reliance Securities said HCL Technologies expected to post 4.4% qoq US$ revenue growth in constant currency as compared to 6.2% qoq in 2Q.

“We have factored -260bp cross currency impact. EBIT% is expected to moderate to 22.2%. Adjusted profit after tax is expected at Rs 1,760 crore, -7.9% qoq impacted by forex loss and lower operating performance. Key monitorables will be IMS growth performance, TCV of deal wins and product engineering services performance,” analyst said results preview.

The stock opened at Rs 933 and touched a high of Rs 939 on the NSE. A combined 3.27 million shares changed hands on the counter on the NSE and BSE.

At 1406 hours, the stock was down 2.7% at Rs 915 on the NSE.