HCLTech Shares Plunge 10% After Missing Quarterly Revenue Estimates

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Shares of HCLTech (HCLT.NS) dropped nearly 10% on Tuesday, marking their worst session since September 2015. The decline came after India’s third-largest software services provider missed revenue estimates for its third quarter and adjusted only the lower end of its full-year sales guidance.

Revenue Miss and Analyst Reactions

HCLTech reported a 5.1% year-on-year rise in consolidated revenue to 298.9 billion rupees ($3.45 billion), falling short of analysts’ expectations of 300.68 billion rupees. The miss was attributed to underperformance in the company’s software business.

Following the earnings release, at least 11 brokerages downgraded their ratings on HCLTech, and four brokerages reduced their price targets, according to LSEG data.

Guidance and Market Sentiment

Despite the disappointing results, HCLTech CEO C Vijayakumar projected an improving demand environment in 2025, echoing optimism expressed by larger competitor Tata Consultancy Services (TCS). The company revised its fiscal year 2025 revenue growth forecast to 4.5%-5% from the earlier 3.5%-5%, factoring in acquisitions.

However, analysts remain cautious. Goldman Sachs noted that the midpoint of HCLTech’s revised revenue guidance fell slightly below expectations, citing weaker growth in the software segment and the gradual ramp-up of discretionary projects. Sanjeev Hota, vice president at Mirae Asset Sharekhan, commented that the lack of an increase in the upper range of revenue guidance further dampened investor sentiment.

Market Performance

HCLTech’s shares were the worst performers on India’s blue-chip Nifty 50 index (.NSEI), which rose 0.5% on Tuesday after a 1.5% drop in the previous session. Despite Tuesday’s plunge, HCLTech had outperformed its peers in 2024, posting a 31% gain compared to a 22% rise in the Nifty IT index (.NIFTYIT).

In contrast, competitors Tata Consultancy Services and Infosys recorded gains of 8.5% and 22.5%, respectively, over the same period. On Tuesday, TCS and Infosys shares dipped by 0.31% and 0.61%, respectively.

 

Orchid Security Raises $36 Million in Seed Funding to Tackle AI-Driven Identity Challenges

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Identity security startup Orchid Security has secured $36 million in seed funding as it officially emerged from “stealth mode” after a year of secretive development. The early-stage funding round was led by Intel Capital and Team8, with additional support from CapitalOne and prominent individual investors.

Focus on Identity Protection Amid AI Growth

Orchid Security aims to address the complex challenge of managing identity systems in an era of rapidly expanding AI technologies. The startup leverages large language models to enhance identity security, helping organizations verify and protect individual identities more efficiently.

Strategic Partnerships and Global Clients

Headquartered in New York with its research and development hub in Israel, Orchid Security is already working with several major firms across industries such as finance, healthcare, manufacturing, and retail. The company’s clientele includes Fortune 100 companies like Costco and Repsol, showcasing its credibility and relevance in high-demand sectors.

The Importance of Identity Verification

Identity verification ensures that businesses can confidently engage with individuals, safeguarding against fraud and unauthorized access. As AI technologies advance, securing these systems becomes increasingly critical to maintaining trust and operational security.

Israel: A Cybersecurity Hub

Israel’s prominence in the cybersecurity space has continued to grow, with cyber-focused companies accounting for 7% of its tech sector. In 2024 alone, cybersecurity startups in Israel raised nearly $4 billion, representing 36% of the total funding for the country’s tech ecosystem. Orchid Security’s R&D roots in Israel align with the nation’s global reputation for innovation in cybersecurity.

Funding Allocation

The $36 million seed funding will be used to accelerate Orchid Security’s growth and expand its use of AI-powered solutions for identity security. With strong backing from industry leaders and a focus on cutting-edge technology, Orchid aims to play a pivotal role in shaping the future of identity verification.

 

Sygnum Hits $1 Billion Valuation After $58 Million Funding Round

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Crypto-focused bank Sygnum has achieved a $1 billion valuation following its successful $58 million funding round, the company announced on Tuesday. The round was led by bitcoin-centric venture capital firm Fulgur Ventures, with additional participation from both new and existing investors, including some of Sygnum’s employees.

Why It Matters

This milestone reflects the recovery in the cryptocurrency industry as investor sentiment rebounds. The sector has shown resilience after enduring challenges such as stricter monetary policies and the collapse of major players like FTX.

Company Overview

Sygnum, headquartered in Zurich and Singapore, specializes in serving institutional clients. It offers services such as cryptocurrency trading, digital asset custody, and crypto-backed lending. The bank also enables its customers to earn interest on their crypto holdings. Unlike other platforms, Sygnum does not cater to retail users.

Recently registered in Liechtenstein, Sygnum is aiming to expand its reach across the European Union and European Economic Area markets. Additionally, it plans to broaden its footprint in Europe and launch operations in Hong Kong. The new funding will be directed towards infrastructure development, product diversification, and international expansion.

Sygnum reported robust financial performance, stating that revenues from its trading services — including crypto spot, derivatives, foreign exchange, and traditional securities — surpassed 2023’s total by the third quarter of 2024.

Key Quotes

“Sygnum has focused on its home markets in Europe and Asia and has no current plans to enter the U.S. market with our own entities,” said Mathias Imbach, co-founder and group CEO. “The U.S. developments for positive crypto market reform are, however, highly encouraging. Sygnum is exploring other options to benefit from this trend, such as partnerships and M&A.”

Context

As the crypto sector stabilizes, firms like Sygnum are leveraging improved investor confidence and regulatory clarity to expand their operations. This funding round solidifies Sygnum’s position as a leading player in the institutional crypto banking space.