Investing.com-- Shares of HCL Technologies Ltd (NS:HCLT), India's third-largest software services provider, slumped on Tuesday following the release of its third-quarter financial results, which missed revenue expectations.
The company on Monday after market close reported a 5.1% increase in consolidated revenue to 298.9 billion rupees ($3.45 billion) for the quarter, slightly below analysts' forecasts of 300.68 billion rupees.
Shares of the company opened sharply lower on Tuesday, falling nearly 10% to 1,797.50 rupees.
Despite the revenue shortfall, HCLTech's net profit rose by 5.5% to ₹45.91 billion, marginally surpassing market expectations. The company also secured new deals worth $2.1 billion during the quarter.
In response to the earnings report, several brokerages downgraded their ratings on HCLTech's stock, and adjusted their price targets.
The Indian IT sector has been experiencing slower growth due to inflationary pressures and macroeconomic uncertainties. However, pro-business policies from the U.S. administration are expected to benefit Indian IT firms, as North America generates over 40% of the sector's revenue.
HCLTech's stock decline weighed on the broader market, with the Nifty IT index falling by 0.7%. Despite this, Indian shares rebounded overall, with the Nifty 50 rising by 0.5% and the BSE Sensex 30 increasing by 0.4%.