HCL Tech slumps on muted outlook
HCL Tech is currently the top loser on the BSE, down over 3.5% at Rs.945 with an intra day low at Rs.935. Its 52-week low is at Rs.628.50, hit in May’14.
The stock has tumbled down today after it too decided to follow the footsteps of TCS, Infosys, NIIT Tech and Mindtree – they all had given a muted outlook for Q4 and HCL Tech too has done the same. For its third quarter ended 31st March 2015, blaming it on the impact of cross currency exchange rates, the company has stated that since the company’s revenues are derived in multiple currencies and significant costs are incurred in INR, the revenues and EBIT for the quarter to be reported in US Dollar would have adverse impact of ~280 bps and ~80 bps respectively. Yet, as though putting some balm on the burn, the company has said that it is confident of achieving EBIT in the range of 21~22% for this quarter.
It expects to post foreign exchange loss of US$ 5.5 mn covering both cash flow hedges and mark-to-market of the foreign currency assets and liabilities. This foreign exchange gain or loss would continue to be reported below EBIT. The treasury income (net) for the quarter is expected to be around $32million being the same level as reported in the previous quarter.