TCS, Infy, HCL Tech among top losers as bleak outlook, muted Q2 earnings fuel crash

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October 12, 2023
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The Nifty IT Index was also down nearly 2 percent at 31,964

Major information technology stocks such as TCS, Infosys, HCLTech and Tech Mahindra tanked on October 12 on the back of a bleak outlook and a tepid set of numbers. The Nifty IT Index was also down nearly 2 percent at 31,964.

Tech Mahindra ended at Rs 1,197, down 2.8 percent from the previous close on the NSE, becoming the top loser on Nifty. HCLTech fell nearly 2 percent to end the day at Rs 1,223. The company is slated to announce its second-quarter results for the financial year later in the day.

Meanwhile, Infosys and TCS were also deep in the red, down by 2.26 percent and 2 percent, to Rs 1,460, and Rs 3,543 respectively. LTIMindtree also tanked to Rs 5,154, down almost 2 percent from the previous close.

HCL Tech is likely to report a recovery in revenue growth and net profit growth even amid a slowdown in tech spending.

Also read: HCL Tech Q2 preview: Revenue recovery seen amid IT slowdown, business mix to boost growth

The company’s profit after tax (PAT) for the July-September quarter is expected to increase by 6.14 percent quarter-on-quarter (QoQ) to Rs 3,750 crore, according to the average of estimates from five brokerages. Revenue is likely to grow 2.3 percent QoQ to Rs 26,909 crore.

The continued impact of cuts in discretionary tech spending is likely to continue to weigh on HCLTech’s second-quarter results.

TCS’ second-quarter revenue growth year-on-year (YoY) was flat in constant currency (CC) terms, while margins up 110 bps sequentially “surprised positively”, said brokerage Jefferies.

For Infosys, as per an average estimate of five brokerages, the company is expected to see a marginal revenue decline of 0.6 percent QoQ to Rs 37,694 crore in Q2FY24 due to weak discretionary spends and slower deal ramp-ups.

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