HCL Tech share price tanks 7% in 5 sessions: Why is IT major underperforming?

HCL Tech Share Price: Shares of HCL Technologies Limited, NSE: HCLTECH, has tanked more than 7 per cent in the last 5 sessions. The counter is under pressure amid growing fears of demand slowdown for IT sector overseas.

Notably, the IT industry is bracing for an economic meltdown in major markets in the US and Europe after sky-rocketing demand during the pandemic years. The Indian IT companies are underperforming for the past few months as they are major exporters of services and they earn in USD. 

It is worth mentioning here that Nasdaq Composite, the index consisting of tech-based stocks, has slipped more than 3 per cent in past the 5 sessions amid growing fear of recession in the US and European markets.

The specific downtrend in HCL came after the Noida based company warned furloughs and spending cuts by clients in the US market could hurt its revenue outlook. The management indicated that FY23's revenue growth could be at the lower end of earlier guidance. It said that the revenue growth in constant currency terms is seen at the lower end of the 13.5-14.5 per cent YoY band.

Pratik Aggarwal, Chief Financial Officer, HCL Tech, however, sought to allay the apprehensions saying the impact of holidays in December is higher than past two years and therefore, the it impacted deal bookings.

Meanwhile, shares of HCL Tech on Monday, December 12 settled at Rs 1029.80, up by 0.22 per cent.

According to Zee Business panelist and market expert Jay Thakkar, the trend in HCL Tech is negative and a closing above Rs 1070 would be an indication of trend reversal on chart. He recommended Selling with an immediate price target of Rs 975. The immediate resistance is at Rs 1070.

Zee Business Managing Editor Anil Singhvi said that the change in guidance by the management will impact the stock. He said that this is the main reason why the IT company's stocks are underperforming.

HCL Technologies Share Price History

So far this year, HCL Tech shares have corrected 11 per cent. At current levels, the stock has a market cap of Rs 2.78 lakh crore.

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