Nifty IT index slips 5% in two days on earnings, valuation worries

Shares of information technology (IT) companies were under pressure for the second straight day, with Nifty IT index slipping 5 per cent in past two trading days after the management of HCL Technologies said that it expected revenue in financial year 2022-23 (FY23) to come in near the lower end of the guidance band. Meanwhile, Credit Suisse too warned of a 10 – 27 per cent valuation-led correction in these stocks amid US macro headwinds.

At its investor meeting held in New York on December 8, the management said the revenue growth guidance for FY23 is likely to come in at the lower end of its 13.5-14.5 per cent year-on-year band in constant currency (CC) terms due to higher-than-expected furloughs in BFSI and Hi-Tech segments.