Hold HCL Tech, says Sandip Agarwal

Hold HCL Tech, says Sandip Agarwal, IT Analyst at Antique Stock Broking.

Agarwal told CNBC-TV18, "We were negative on HCL Tech primarily on account of wage hike and we strongly believe that the ERP space, which contributes around 20% of the business is at a very high end consultancy kind of business which always will be under pressure in uncertain macro. So to that extent still we were forecasting a good growth on the revenue part but it has come below even our estimates."
He further added, "I think there is more problems on the growth side, if you see the growth has been much lower than what it was expected; it came just around 4.5% in constant currency around 5.2-5.1%, so I think the numbers are more disappointing in case of HCL Technologies versus TCS if you see from that perspective. So we think that the BPO business if you see in this quarter also had some pressure, so we think BPO and ERP will continue to be challenging going forward also. We have hold rating on HCL Tech as of now and we maintain that rating.