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HCL Tech Q4 preview: Consolidated PAT likely to fall 21% QoQ, all eyes on FY22 guidance



HCL Tech Q4 preview: Consolidated PAT likely to fall 21% QoQ, all eyes on FY22 guidance

MUMBAI: HCL Technologies is expected to report a near-21 per cent quarter-on-quarter fall in consolidated net profit to Rs 3,152 crore for the quarter ended March. The IT services company’s consolidated revenues is expected to grow 2.5 per cent to Rs 19,779.6 crore.

The company had guided for 2-3 per cent quarter-on-quarter growth in revenue in constant currency terms. The company will report its March quarter earnings on Friday.

The IT company’s operating performance in the quarter is likely to be underwhelming as analysts expect consolidated operating margin to shrink 430-470 basis points on a sequential basis because of wage hikes undertaken by the company.

HCL Tech made a wage hike in January and paid a special bonus of Rs 700 crore to its employees in order to retain talent amid high demand for skilled IT professionals in the sector.

Investors’ focus, however, will be on the company’s growth guidance for the new financial year. Analysts expect the company to guide for 11-13 per cent growth in consolidated revenues in constant currency terms, which will make it one of the fastest growing IT companies in the world.

The market will also seek management’s comments on the demand environment as well as deal win momentum going ahead. Investors will also watch out for the attrition rate in the company, given high rates reported by Infosys and Wipro and the impact of mitigating efforts on margin performance.

Shares of HCL Technologies ended 0.1 per cent lower at Rs 960.8 on the National Stock Exchange.

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