Investing.com — Stocks HCL Technologies Ltd (NS:), India’s third-largest software services provider, fell sharply on Tuesday after reporting third-quarter results in which revenue fell short of expectations.
The company reported after market close on Monday that consolidated revenue for the quarter rose 5.1% to 298.9 billion rupees ($3.45 billion), slightly below analysts’ expectations of 300.68 billion rupees.
The company’s shares started sharply lower on Tuesday, dropping nearly 10 per cent to Rs 1,797.50.
Despite the revenue shortfall, HCLTech’s net profit increased by 5.5% to Rs 45.91 billion, slightly above market expectations. The company also won new business worth $2.1 billion during the quarter.
Following this earnings report, multiple securities companies downgraded HCLTech’s stock ratings and adjusted their price targets.
India’s IT sector is experiencing slow growth due to inflationary pressures and macroeconomic uncertainty. However, the US government’s pro-business policies are expected to benefit Indian IT companies as North America generates over 40% of the sector’s revenue.
The decline in HCL Tech’s stock price weighed on the overall market, causing the index to fall by 0.7%. Nevertheless, Indian stocks generally rebounded, rising 0.5% and 0.4%.
