IT firm HCL Technologies Ltd. doesn’t expect the new coronavirus pandemic to have a significant effect on its business even as its impact on the ongoing quarter’s numbers is yet to be quantified.
The software services exporter had invoked business continuity plan, ensuring delivery to clients and employee commitments, and risk management framework in January to minimise the impact of the virus outbreak on employees and clients, according to an exchange filing. “Our exposure to more impacted verticals is not significant. Bookings during this quarter have largely been on track as significant part of closures happened in January.”
Domestic equities tracked the worst global selloff in more than a decade as the novel virus stalled economic activity, threatening to push the world into a recession.
Indian IT companies are expected to see a disruption, given that they generate most of their business overseas and the bulk of it comes from clients in financial services, manufacturing and communications sectors. The NSE Nifty IT index has corrected 19 percent so far this year as the Covid-19 cases rose to more than 1,000, including 29 deaths. HCL Technologies has lost 24 percent of its value during the period.
The IT company said 76 percent of its Indian employees and 92 percent of its staff abroad are enabled to work from home, and that it has not witnessed any major disruption in operations.
After the third quarter, HCL Technologies, which earns 63-64 percent of revenue from America and another 29 percent from Europe, hiked its constant currency revenue guidance to 16.5-17 percent for the ongoing financial year from 15-17 percent forecast earlier. It also raised operating margin guidance to 19-19.5 percent from 18.5-19.5 percent.
Analyst estimates compiled by Bloomberg pegged the company’s revenue growth at more than 10 percent in the upcoming fiscal. The operating margin forecast for 2020-21 has not been provided.