HCL Tech Q1 Preview: Tough business environment may pull down PAT by 4% QoQ

economictimes.indiatimes.com:

HCL Technologies Ltd is likely to have seen subdued growth in June quarter earnings, due to a slowdown in technology spending and weak profitability. The software major’s consolidated net sales are expected to rise a mere 0.6% sequentially in the quarter to Rs 26,756 crore, according to the average of estimates given by 11 brokerages. Consolidated net profit is set to fall 4.3% sequentially to Rs 3,812 crore, the estimates showed.

On a year-on-year basis, the topline and bottomline are seen rising 14% and 16%, respectively. The software major is scheduled to release its earnings after market hours on Tuesday.Here are the key things to watch out for Dalal Street investors:FY24 GuidanceGiven the slowdown in discretionary spending and delay in decision making, some analysts see HCL Technologies cutting the upper end of its sales growth outlook for FY24. The country’s third largest software major forecasted a 6-8% growth in constant currency revenue in the current financial year.

This is against the nearly 14% growth it clocked in FY23. “There is a fair probability that the 6-8% growth guidance given may be revised down either post 1QFY24 or post 1HFY24 largely driven by lower demand from BFS and also from likely pricing pressure,” said Nirmal Bang Institutional Equities in a note.TCV Deals Analysts expect deal wins to be largely flat sequentially for the software major. In the March quarter, the company had won 13 large deals worth $2.07 billion.