HCLTech Q3 Preview: Revenue to grow better than peers; company may retain FY24 guidance

economictimes.indiatimes.com:

The company is seen reporting a nearly 5% sequential rise in consolidated revenue to Rs 27,959.40 crore, and net profit is expected to increase by nearly 7% to Rs 4,085 crore, according to the average of estimates given by 11 brokerage firms.
On a year-on-year (YoY) basis, the topline is expected to rise 4.7%, while the bottomline may drop a marginal 0.3%.
In constant currency terms, analysts expect HCLTech’s revenue to grow 4.6% sequentially in the quarter gone by.
The country’s third largest software service provider is scheduled to release its earnings on Friday, 12th January.
The growth in the topline is likely to be led by the products and platform segment, with Nuvama Institutional Equities pegging a 20% sequential growth for this segment. The services vertical is expected to report a 2.5% sequential growth, driven by the Verizon deal and integration of the recently acquired German automotive engineering solutions provider ASAP Holding.

FY24 Guidance

Analysts widely expect HCLTech to retain its growth and margin guidance for FY24.
Post the September quarter results, HCLTech had slashed its constant currency revenue growth guidance for FY24 to 4-5% from 6-8%, in the backdrop of a lower-than-expected growth in the first half of the year.
However, including the contribution from ASAP Holding, the revenue growth is expected to be 5-6%, the company had said.
HCLTech had also lowered guidance for the services business to 4.5-5.5% from 6.5-8.5% for FY24.
On the profitability front, it had guided for 18-19% margin for the ongoing financial year.

Margin Show

Despite wage hikes and impact of furloughs, HCLTech’s operating margin is expected to improve due to higher contribution from high-margin products and