Strong deal wins across segments will be key to HCL Tech's revenue growth

Higher investments and muted growth in the products business can dent margins

Pegged back by muted showing in the products and platforms (P&P) space, HCL Technologies posted a lower-than-expected revenue growth performance in the March quarter. The constant currency sequential growth of 2.5 per cent was below the 3 per cent growth expected by the Street as the P&P segment (down 3.9 per cent) was impacted by seasonality and product rationalisation.
 
While the overall operating profit margin was down 554 basis points on a sequential basis, excluding the milestone incentives, margins were 250 basis points lower at 20.4 per cent. This was, however, better than the Street’s estimates. The fall in