BENGALURU (Reuters) -India’s HCLTech trimmed its full-year outlook for revenue growth on Thursday, signalling near-term weakness in spending as its clients remained cautious due to uncertain demand and a challenging macroeconomic environment.
The company now expects organic growth in fiscal 2024 to be between 4-5% year-on-year in constant currency terms from the 6-8% it expected earlier. It also expects growth including German acquisition ASAP to be between 5-6%.
HCLTech, India’s No.3 IT firm by market capitalisation, said in July it would buy automotive engineering services firm ASAP Group for $280 million.
Consolidated net profit for the company rose 9.8% to 38.32 billion rupees ($460.35 million) in the second quarter ended Sept. 30, marginally beating LSEG analysts’ average expectations of 37.12 billion rupees.
Consolidated revenue from operations rose over 8% to 266.72 billion rupees, but fell short of estimates of 268.14 billion rupees.
The results come after larger rivals Infosys cut the upper end of its full-year revenue outlook and TCS missed Q2 revenue estimates on weak client spending.
Both companies had flagged an uncertain demand outlook in the near term, with TCS saying it was unclear on when discretionary spending will be back, as fears of economic slowdown and higher-for-longer interest rates pushed clients in key U.S. and European markets to cut spends.
Last month, IT major Accenture signalled dullness through next year and forecast full-year earnings below Wall Street targets.
Shares of HCLTech closed 1.75% lower on Thursday, ahead of results.
($1 = 83.2408 Indian rupees)
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Janane Venkatraman)
