HCLTech Hit by Cloud Ransomware, Shares Dip – Security Incident Contained, Investigation Ongoing.
HCLTech shares will be in focus on December 20 as the IT services firm reported that a ransomware incident has been recorded in an isolated cloud environment for one of its projects. The firm said no impact on the overall network had been observed due to this incident.
“Cybersecurity and data protection are top priorities for HCLTech. A detailed investigation is underway in consultation with relevant stakeholders to assess the root cause and take remedial action as necessary,” the company said in an exchange filing.
HCLTech, among other IT stocks, will also be in focus since global peer Accenture reported its quarterly result on December 19, indicating how the domestic earnings season will likely be for the tech services companies.
IT services provider Accenture forecast second-quarter revenue below Wall Street targets, anticipating cautious spending by clients as macroeconomic uncertainty remains an overhang. Accenture expects revenue from $15.40 billion to $16.00 billion. Analysts polled by LSEG had forecast revenue of $16.29 billion.
According to brokerage firm Morgan Stanley, Accenture’s weaker-than-expected Q2 guidance offset an in-line to slight beat on the first quarter revenue. Also, incremental concerns in the UK no and change to its discretionary spending outlook offset an in-line to slight beat on Q1 revenue, the brokerage said.
HCLTech shares ended the December 19 session more than a percent lower at ₹1,488.15. So far in 2023 (year-to-date), the stock has given a return of more than 43% to its investors as against benchmark Sensex, which has risen nearly 19%.
On December 19, Kotak Institutional Equities downgraded HCLTech to ‘add’ from ‘buy.’ “Rollover to December quarter and 2X increase in multiple factoring in lower macro uncertainty following rate cut path laid out by US Fed lead to 9-16% increase in FVs for IT stocks. We cut the rating on HCLT to an ADD from BUY following a 13% stock price increase in the past month,” the brokerage firm said.
Meanwhile, on December 17, Citi gave a neutral call on the firm with a target price of ₹1,295. The New York-based brokerage said it was difficult to call out when the demand situation would improve and that there is hardly any budget flush. It noted that furloughs are higher than any of the previous two years. According to the firm, the medium-term growth outlook remains low double-digit growth.
