 "HCL Tech Q4 results to be announced tomorrow: Key things to look out for")
IT services firm HCL Technologies Ltd will announce its financial results for the last quarter of the previous financial year (Q4FY23) tomorrow. This comes days after Tata Consultancy Services (TCS) and Infosys announced their quarterly results. Both of the companies missed their estimates.
In Q3FY23, the company reported a consolidated net profit of Rs 4,096 crore, 19 per cent higher than the same quarter in FY22. On a sequential basis, net profit was up 17.4 per cent. The revenue jumped 20 per cent to Rs 26,700 crore.
The firm also trimmed its revenue growth forecast to 13.5-14 per cent and margin guidance to 18-18.5 per cent for the year ending March 2023, both in constant currency terms. In the previous quarter, HCL Tech had guided for revenue growth of 13.5-14.5 per cent and a margin of 18-19 per cent.
Also, it declared a dividend of Rs 10 per share. It was the 80th consecutive quarter of dividend payouts.
HCL Tech Q4 results: What to expect?
According to Jefferies, HCL Tech is expected to deliver a degrowth of 1.2 per cent QoQ with 1.3 per cent QoQ growth in the services segment more than offset by a 19 per cent QoQ decline in products and platforms (P&P) segment due to seasonal weakness.
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Reliance Securities sees HCL Tech's revenue declining 1.6 per cent QoQ and 0.5 per cent QoQ, driven by a 20 per cent QoQ decline in P&P.
Jefferies also said that the EBIT margins are expected to contract by 100 basis points. Emkay Global sees its EBIT margin declining by 120 bps.
HCL Tech Q4 results: What to look out for?
Among key things to watch for in the HCL Tech result are:
- Dividend payout
- FY24 outlook on product business
- Commentary on the deal pipeline, especially large deals, and pricing
- Attrition trend
- Margin outlook
- Merger and Acquisition (M&A) plans
- Tech spending by clients