HCLTech, India’s No.3 IT services provider, forecast lower-than-expected revenue growth for the current fiscal due to cuts in IT spending.
HCLTech’s weak outlook followed disappointing earnings from market leader Tata Consultancy Services (TCS) and No.2 Infosys Ltd’s forecast of single-digit revenue growth this financial year.
HCLTech said it expects revenue to increase 6 percent-8 percent in the financial year ending March 2024 on a constant currency basis.
“In tech and telecom, growth decelerated in the second half of the year. There is still pressure in the segment and rampdowns. We think most of the pain is behind us. But the environment across the board has been volatile,” HCLTech CEO C Vijayakumar said.
There is some stress in terms of deals as well as project ramp-up delays, especially on the discretionary spending side, Vijayakumar added.
Indian IT services companies, especially the larger ones, are likely to be hit by the turmoil in the U.S. and European financial ecosystem since mid-March as they account for a lion’s share of revenue both by geography and sector.
HCLTech said that its exposure to the U.S. banking crisis was very limited.
HCLTech reported a 10.9 percent rise in consolidated net profit at 39.83 billion rupees ($484.93 million) for the quarter ended March 31.
HCLTech’s revenue from operations rose 17.7 percent to 266.06 billion rupees.
The number of employees at HCLTech reached 225,944 in March 2023 vs 222,270 in December 2022. HCLTech added 3,674 people during January-March 2023. The number of freshers added during the quarter was 4,480, HCLTech said.
