In past three four trading sessions, since September 30, the stock has declined 16% after the company issued a profit warning for the Sep’15 quarter. The CNX Nifty gained 3%, while IT index down less than 1% during the same period.
HCL Technologies forecasting tepid US$ revenue growth in Q1 due to negative forex impact of 80 basis points, a slowdown in the infrastructure management services (IMS) segment due to transition issues and client-specific issues in a public services application development and maintenance (ADM) project, which should lead to a provision of US$ 20 million.
The profit warning was a negative surprise and would weigh on HCL Technologies’s growth and margins over the near term. The company has disappointed on margins over the past two quarters, and this profit warning will continue to weigh on the stock, says Rumit Dugar and Saumya Shrivastava, analysts at Religare Institutional Research.
At 01:20 pm, the stock was down 3.4% at Rs 824 compared to 0.12% rise in the CNX Nifty. A combined 3.3 million shares changed hands on the counter on the NSE and BSE so far.
"Following the 13% post-revenue-warning correction, valuation looks attractive at ~13.5x FY17F EPS of Rs 63.9 (~25-30% discount to Infosys/TCS). HCL Technoligies and Cognizant Technologies remain our top buys," he adds.