After TCS and Wipro, two more IT companies have issued revenue warnings, saying the lately Chennai deluge may effect their December quarter financial performance.
Take Solutions shares pile nearly 8 per cent, while Hexaware shares tumbled over 1 per cent on Friday.
Take Solutions, which employs over 450 people in Chennai, said unprecedented rainfall and deluge led to delays in client delivery. Due to the facilities being non-operational for a week, there have been delays in client delivery.
This loss of operational time and certain one-time costs associated with this natural calamity are need to effect the revenue and margins.
Mumbai-based Hexaware Tech said Chennai flood is need to have a “material” effect on the company’s revenue in the December quarter.
We have a one-time effect on cost due to wide recovery efforts.
44 per cent of Hexaware’s employees are located in Chennai, where the company has its bigger delivery centre that contributes 23.5 per cent of the global revenue.
As of 11.03 a.m., have Solutions shares traded 6.5 per cent lower at Rs 169.60, while Hexaware shares were down 0.2 per cent at Rs 240.50 as compared to 0.6 per cent fall in broader markets.
The devastating Chennai deluge led to hundreds of deaths in India’s fifth largest city. The Indian economy suffered a $3 billion loss from severe rainfall and flooding in November and early December, reinsurance broker Aon Benfield said in its monthly report on global catastrophes.