7 lessons to learn from this year’s investment mistakes In an ever-evolving investment landscape, it is not advisable to sit ideal and wait for your investment to grow on their own. You must keep adjusting and accommodate new strategies to ensure your investment grows as expected and you are able to achieve your financial goals. Investing is a journey marked by ups and downs, and the year 2023 was no exception. As we step into 2024, it’s crucial to distil valuable lessons from the past investment mistakes to chart a smarter path forward. Every mistake is an opportunity to learn and grow. However, some investors repeat past errors without adapting new strategies. Flexibility and your willingness to learn from setbacks are important. One of the biggest mistakes often made is acting on impulse. In 2023, many investors fell prey to the allure of quick gains, jumping into trendy investments without proper research. To invest better in 2024, take a step back. Before diving in, thoroughly research any opportunity, ensuring it aligns with your financial goals and has a solid foundation. Adhil Shetty, CEO, Bankbazaar.com, says, “Start by identifying your financial objectives. Whether it’s saving for retirement, buying a house, or growing wealth, having clear goals will guide your investment decisions. Periodically review your portfolio to ensure it aligns with your goals and risk tolerance.” Also Read: Retirement planning takes a major hit as Indians saving less for retirement: Survey Putting all your eggs in one basket can be risky. 2023 taught us that a well-diversified portfolio across various asset classes can shield you from market volatility. Consider spreading your investments across stocks, bonds, mutual funds, and other instruments to reduce risk exposure. Understanding and managing risks is fundamental. Last year’s market swings highlighted the importance of setting clear risk tolerance levels. This year, ensure your investment strategy includes risk management techniques such as setting stop-loss orders or maintaining an emergency fund to cushion against unexpected market turns. Emotions can cloud judgment. Fear and greed often lead to irrational decisions. To invest better in 2024, detach emotions from your investments. Develop a long-term strategy and stick to it, irrespective of short-term market fluctuations. Patience is indeed a virtue in investing. Building wealth takes time. Therefore, avoid chasing immediate gains and instead focus on consistent, disciplined investing. This strategy, compounded over time, can yield significant returns. Lack of financial education can be detrimental. Make 2024 the year of learning. Stay updated on market trends, investment vehicles, and economic developments. Engage with financial resources, books, and seminars to empower yourself with knowledge. Make 2024 the year of learning. Every mistake is a learning opportunity. Reflect on past errors and adapt your strategies accordingly. Embrace a growth mindset, where setbacks are seen as opportunities for improvement. Lack of financial education can be detrimental. Stay updated on market trends, investment vehicles, and economic developments. Engage with financial resources, books, and seminars to empower yourself with knowledge. By applying these strategies, investors can navigate the investment landscape more prudently in 2024. Remember, prudent investing is not just about avoiding mistakes but also about learning and growing from them.
Services miss estimates; Software better than expected: Services business grew 0.6% q-o-q cc and missed HCLT’s Q3FY23 guidance, mainly due to a 3.8% q-o-q cc decline in the ER&D segment. Growth in the IT&BS segment moderated slightly to 1.6% q-o-qcc but was in line with estimates. BFSI and Life Sciences were the key growth drivers, while communications were the drag among verticals. Growth was led by the Americas region, while Europe and ROW posted declines.
Decline in bookings reflects delays in decision-making: HCLT won 10 large deals in services and three large deals in Software with net-new deal TCV of $2.1bn, down 8% y-o-y. Deal wins were driven by the services portfolio, were centered on cost optimisation and vendor consolidation and came mainly from BFSI, manufacturing and Life Sciences verticals. Management highlighted a ramp-down in discretionary spending in Hitech and communications verticals but pointed to a strong deal pipeline.
FY24 guidance in line with expectations: HCLT has guided for 6-8% y-o-y growth for overall business and 6.5-8.5% y-o-y cc growth in services segment and 18-19% margins in FY24—all in line with our assumptions. We maintain our FY24-25 cc revenue growth and margin estimates and expect HCLT to deliver 6.5% cc revenue growth and 18.4% margins in FY24. However, we lower our earnings forecasts by 2% to factor the higher tax rate indicated by the management.
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Raise PT: HCLT has fared better in Q4, particularly in North America and BFSI, unlike its peers. However, rising demand uncertainty as a US recession nears remains a concern. HCLT’s stock at CMP trades at 17x PE and offers a 5% yield, which in our view should limit downsides and derating. Hence, we raise our target PE to 17x (16x earlier) and raise our PT to Rs 1,125, offering 8% potential upside.