HCL Tech shares surge over 3% ahead of Q3 results this week. What brokerages expect

economictimes.indiatimes.com:

HCL Technologies rose over 3% to Rs 1,507.2 in Wednesday trade on BSE ahead of its third-quarter results due on Friday, January 12.

Meanwhile, a total of 25,75,833 equity shares worth Rs 383.6 crore also changed hands in Wednesday's trade.

At 12:05 pm, the scrip was trading 2% higher at Rs 1,490 on BSE. The stock has also surged 33% in the past six months, while it has rallied 40% in the last year.

In Q2 FY24, HCL Technologies reported 10% growth in its consolidated net profit at Rs 3,832 crore. The same stood at Rs 3,489 crore in the last year period.

Its revenue from operations during the period rose 8% to Rs 26,672 crore against Rs 24,686 crore in the same period last year.

In Q2, in constant currency terms, revenue was up 1% sequentially and 3% year-on-year (YoY). Segment-wise, services revenue rose 3% (CC), while digital revenue was up 4%.

Here's what brokerages expect from HCL Technologies' Q3 results:

Dhruv Mudaraddi, Research Analyst, Stoxbox

We expect HCL's Q3FY24 revenue to grow in the mid-single digits QoQ driven by the Verizon deal ramp-up, the additional contribution from the ASAP Group acquisition for two months, and the seasonality benefits in the Products and Platform (P&P) business.

EBIT margins are also expected to improve owing to cost efficiencies, seasonal strength in the high-margin P&P business, and forex benefits. However, this improvement will be partly offset by wage hikes, furloughs, and the costs associated with large deal ramp-up.

Axis Securities

We expect HCL Tech to report revenue growth of 6.5% QoQ in rupee terms while delivering an operating margin expansion of 65 bps. Key factors to watch out for are a) Deal TCV/deal pipeline, b) Pricing scenario, and c) Outlook on growth,