You do not get this kind of opportunities every day to buy great quality business at discounted price. Looking through our eyes the media has really overreacted on the situation. The headlines like “HCL Technologies’ 15% fall biggest in nearly 7 years”, “HCL Technologies plunges after second sales warning in 6 months” and “Does HCL Tech’s profit warning ring alarm bells for all IT players?”.

If you do take these headlines seriously and take selling decisions on those headlines basis than you are not a second level thinker. HCL Technologies biggest fall in the last 7 years on the news of one client’s disengagement and loss of 20 million dollar revenue and loss of three quarter of percentile profit margins on currency movements does not make sense to us.

If you compare that 20 million revenue loss to their 2015 year revenues then we are talking a loss of no more than one and quarter percentile and loss of approximately 2 million dollars profit due to currency fluctuation.

When business adds more than 20 million dollar client, price of stock does not climb by 15%. Currency losses and revenue losses is the part of the business when you do business in the multiple currencies.

We do know HCL Tech is going through tough times but still we can see the bright prospects of this business which will reflect in the future quarters and definitely market did overreacted on last Thursday.

We do hold HCL Technologies in our fund and we did participate on the opportunity thrown to us to accumulate few more on last Thursday and will do hope to accumulate more on Monday if they still trade weak.

Aziz Dodhiya is the co-founder and chief investment officer for the Valueoperations private fund and you can reach him at aziz@valueoperations.com to discuss about this business prospects and to know his views or leave your comment on this post and he will get back to you with his views.

This post is not to be considered as advice to buy HCL Tech as we are not professional advisers and we do not know your financial condition.