HCL Tech Q3 Results Preview: Profit may grow in double-digit to Rs 3,850 crore, change in revenue guidance unlikely

According to Zee Business research, HCL Tech’s consolidated profit after tax (PAT) may surge by 10.6 per cent at Rs 3,850 crore for the three-month period against Rs 3,489 crore in the previous quarter.

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HCL Tech Q3 Results Preview: India’s third largest IT firm – HCL Technologies is expected to report healthy third-quarter earnings for the financial year 2022-23 (Q3FY23) on Thursday, January 12. Tata Consultancy Services (TCS) on Monday opened the October-December quarter earnings season, by reporting mixed numbers.

According to Zee Business research, HCL Tech’s consolidated profit after tax (PAT) may surge by 10.6 per cent at Rs 3,850 crore for the three-month period against Rs 3,489 crore in the previous quarter.

IT heavyweight’s consolidated revenue in dollar terms may grow by 4 per cent quarter-on-quarter (QoQ) at $3205 million, whereas in rupee terms it is likely to jump nearly 7 per cent QoQ to Rs 26,400 crore in the third quarter of the current fiscal, Zee Business research report noted.

In constant currency terms, IT services’ revenue may see an almost 2 per cent surge, while Products and Platforms are supposed to grow at 18 per cent during the quarter, the research report mentioned.

The research analysts at Zee Business expect HCL Tech to retain 13.5-14.5 per cent CC growth guidance and 18-19 per cent EBIT (Earnings Before Income Tax) margin guidance. In this regard, even ICICI Direct believes that the IT firm is unlikely to change its revenue and EBIT margin guidance in Q3.

In Q3, the IT giant’s EBIT is seen growing almost 9 per cent sequentially at Rs 4,820 crore. Similarly, margins are expected to expand to 18.3 per cent from 17.9 per cent QoQ.

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In line with Zee Business expectations, Sameer Pardikar, Research Analyst at ICICI Direct, expects HCL Tech to report 2.5 per cent QoQ revenue growth in IT services in CC terms and be impacted by some pockets of weakness due to macro concerns.

As indicated by the company on its investor day in 2022, furloughs this year are expected to be higher than previous years and it may impact its revenue growth in IT services in Q3 as well as in H2 of this fiscal, the domestic brokerage said in its preview expectations.

Key monitorable: Improvement in large deal-wins data; guidance retention; outlook on Engineering and R&D services and Products business, and attrition rate for the December quarter.

India's 2nd largest IT firm Infosys will also announce its December quarter earnings on January 12, and it is also expected to come out with nearly the same numbers as HCL Tech with retained CC revenue guidance at 15-16 per cent, ICICI Direct said in its preview report.

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HCL Tech Q3 Results Preview: Profit may grow in double-digit to Rs 3,850 crore, change in revenue guidance unlikely

According to Zee Business research, HCL Tech’s consolidated profit after tax (PAT) may surge by 10.6 per cent at Rs 3,850 crore for the three-month period against Rs 3,489 crore in the previous quarter.

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