IT wrap: Earnings-heavy week with focus on Wipro, HCL Technologies; H1B continues to haunt firms

This was an earnings-heavy week for Indian IT firms, with the focus being on two large caps — Wipro and HCL Technologies, and several mid caps including L&T Infotech, Hexaware, L&T Technology Services and so on.

HCL Technologies on Tuesday reported a better-then-expected result, but said its financial services vertical was impacted with two client-specific issues. It also did not change its forecast for the year.

Wipro reported a mixed set of numbers, but showed strong organic growth after a few quarters of client-specific issues that have overshadowed the company’s digital efforts.

Wipro also named former State Bank of India chairman Arundhati Bhattacharya as independent director at the firm.

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Also Read: Wipro reports 10% decline in Q2 net profit, names Arundhati Bhattacharya as Independent Director

The Street, however, is overall more bullish about Wipro in the short term given its turnaround story becoming more apparent. Analysts have pointed out that HCL Technologies’ core growth has been slowing and greater dependency on inorganic revenue streams will be a concern in the short term.

Also Read: IT’s a tale of two companies: market hopeful of Wipro, cautious on HCL Tech

Hexaware reported a good quarter but CEO R Srikrishna told Moneycontrol there was some impact from unexpected furloughs and non-availability of adequate talent in the United States. However, the company expects the next quarter to be better.

Also Read: Talent acquisition issues to persist, but expect growth to bounce back in Q4: Hexaware CEO

H-1B visa issue has continued to haunt Indian IT firms ever since President Donald Trump took office. A new move by the administration to redefine some basic terms will have a longer impact in the industry.

Also Read: Donald Trump’s H-1B visa reform plan may impact outsourcing policy of IT firms

Most IT firms who are reporting results this quarter have been at pains to point out their local hiring efforts in the US and other geographies, in addition to declaring their reduced dependence on the H-1B visas.

Meanwhile, Prime Minister Narendra Modi on October 24 inaugurated a platform called “Main Nahi, Hum,” to collate the corporate social responsibility efforts of technology firms operating in India.

The slogan has changed hands between rival parties a couple of times.

Also Read: One tagline, two parties: ‘Main Nahi, Hum’ has switched sides between rivals Congress, BJP over the years

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