HCL Tech revenue slips in Q1, retains weak FY25 projection

livemint.com:

TCS too received a big boost from a $1.83-billion network project that it is executing for Bharat Sanchar Nigam Limited (BSNL). A senior equity analyst at a Mumbai-based brokerage firm said the company’s performance was “better than expectations." “There is a clear environment of weakness in the industry, and recovery has not panned out as yet. On overall terms, HCL’s business has strong foundations, and we saw its resilience clearly in the last fiscal.

We believe that the company should be able to meet the upper end of its annual revenue growth guidance this fiscal," the analyst said. Sanjeev Hota, head of research at brokerage firm Sharekhan by BNP Paribas, said the firm will maintain its buy rating on the HCL Technologies stock, assessing the quarterly performance as “decent". Overall, HCL Tech reduced staff by 8,080, attributing it largely to the sale of a joint venture with US-based financial services firm State Street.

Ramachandran Sundararajan, chief people officer of HCL Technologies, said the company still expects to meet its target of hiring 10,000 freshers, a guidance given out last quarter. HCL Technologies reported $496 million net profit in the June quarter, up 3.3% sequentially, higher than $461 million projected in a Bloomberg poll. While the software products business is historically its primary margin booster, operating margin for this vertical declined 40 bps sequentially to end at 20.5% for the June quarter.

Mint reported last month that barring FY23, profitability of the software products unit, rebranded HCLSoftware in June 2022, has been falling each year since the IBM transaction. Its target operating margin of 30% has been met only once, in FY20. A weak start to the financial year, thus, puts a