‘Small warnings have started’: Why HCL Tech shares slumped 5% today

Chief executive officer C Vijayakumar at company’s investor day said: “In October, we had increased our guidance from 13.5 to 14.5. we had certain assumptions which helped us to devise 16-17% services growth. we had assumed certain furloughs. But we are seeing a bit higher. BFSI is the segment which is little bit impacted by furloughs followed by tech companies,” he said. 

Market veteran Sandip Sabharwal, the former head of equity at SBI MF, in a tweet said: “Small warnings have started. Will become bigger as we move into 2023. Avoid Technology and Export Oriented sectors in general. You will get them cheaper over the next 6 months.”

Infosys and Tech Mahindra shares also struggled today, down between 0.8% and 1%.  IT stocks have seen a sharp correction this year on fears of demand slowdown. The Nifty IT index is down 22% this year as compared to 7% rise in broader Nifty50 index.

India’s IT services industry was one of the top benefactors during the pandemic as several businesses rushed towards digitising infrastructures and adopted remote or hybrid working policies. In 2021, Nifty IT index had surged nearly 60%. 

However, top-tier IT firms have recently given cautious forecasts so far amid the economic uncertainty globally as global central banks tighten their monetary policies. TCS had earlier had said clients are taking longer to decide on bigger deals.