BENGALURU (Reuters) -HCLTech, India’s No.3 IT services exporter, on Thursday forecast lower-than-expected revenue growth for the current fiscal amid worries of recession in major markets like the United States and Europe and global banking turmoil.
HCLTech said it expects revenue to increase 6%-8% in the financial year ending March 2024 on constant currency basis, missing average analysts’ estimates of 10.42%, according to Refinitiv IBES data.
HCLTech’s weak outlook followed disappointing earnings from market leader Tata Consultancy Services and No.2 Infosys Ltd’s forecast of single-digit revenue growth this financial year.
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.
European clients were delaying decisions, HCLTech had said back in January, well before the current turmoil.
Meanwhile, the company reported a 10.9% rise in fourth-quarter profit. HCLTech’s consolidated net profit rose to 39.83 billion rupees ($484.93 million) for the quarter ended March 31.
Its earnings before income tax (EBIT) margins fell to 18.18% from 19.6% in the previous quarter. It expects EBIT margins of 18% and 19% for FY 2024.
($1 = 82.1350 Indian rupees)
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Janane Venkatraman)
