IT Stocks Lead Market Sell-Off, Nifty IT Declines Over 4%, HCLTech Loses ₹40,000 Crore in Market Capitalisation

While domestic equity indices are trading lower on Wednesday, information technology (IT) stocks are leading the sell-off.

Lower-than-expected quarterly numbers are weighing on IT stocks in early trade.

Nifty IT is the worst-performing index among the 19 sectoral indices of the National Stock Exchange.

The index declined as much as 4.1 percent during early trade. The major contributor to this steep decline is the stock of HCLTech, which is trading in deep losses after missing street estimates in the March quarter.

The stock opened around 6.7 percent lower at Rs 1,344.05 on the bourses compared to the previous close of Rs 1,441.55 apiece. During early trade, the stock fell up to 10.3 percent to Rs 1,294.45 apiece.

This is the steepest fall for the stock in almost 11 years. The company has lost about Rs 40,000 crore in market capitalisation due to the sell-off.

HCLTech on Tuesday reported a 4 percent rise in consolidated net profit at Rs 4,488 crore in the March quarter, falling short of analysts’ Rs 4,657 crore estimates.

The company’s consolidated revenue of Rs 33,981 crore was higher by 12.3 percent in the January–March quarter. HCLTech is the third-largest IT services company in India.

Apart from HCLTech, shares of Tech Mahindra (down over 5 percent), Coforge (down 4.4 percent), Persistent Systems (down 4 percent), Infosys (down 3.5 percent), and Tata Consultancy Services (down 2 percent) were also trading lower.

The sell-off in TCS and Infosys has led to a decline in their market capitalisation in the range of Rs 15,000–20,000 crore each.

Out of the 10 stocks in the IT index, only Oracle Financial Services Software was trading in the green with a gain of 1.3 percent.

Tech Mahindra and Oracle are slated to announce their March quarter results today.