Why is HCL Technologies down today?

 HCL Tech tanked 7%, Why?

Correction 

• There is a free fall in HCL tech share of more than 5% in just an hour after the markets have opened. 

BUT WHY?

• The fall is because the management of the company has indicated that the Financial year 2023 growth would be on the lower spectrum of the 13.5% to 14.5% band which the company gave guidance of earlier.

• This commentary by the management clearly indicates that the December quarter might be weaker than what investors would be expecting. 

• While they also maintained their earlier guidance of 16-17% growth in the services business, there was also an indication of weakness as again growth is expected at the lower end of the same band.

• The near term headwinds are impacting the company in a very negative way. The price increases are getting delayed which is impacting margins & hence profits too in a big way.

HCL Tech daily chart

• This also might be the reason why many brokerages have been underweight on the company since a long while. Even Morgan Stanley was surprised with the near term macro headwinds which the company talked about. 

• "BFSI is the segment which is most impacted by the furloughs followed by tech companies", the company's CEO Mr. C Vijaykumar said. 

• As a result of this fall, the whole IT index saw a steep correction with other giants like Infosys, Tech Mahindra, Wipro also having a downside along with HCL Technologies.

Infosys daily chart

Tech Mahindra daily chart

Nifty IT index daily chart

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