Revenues and margins declined sequentially. The company’s EBIT came at ₹4,795 crore, down 4.4% QoQ & up 7.5% YoY.
Following the Tata Consultancy Services (TCS) earnings Thursday, several technology stocks surged to lifetime highs Friday, and were at the forefront of the stellar showing of the broader stock indices. TCS led the pack of five technology companies, including HCL Tech, that were the top five Nifty gainers.
AgenciesHCLTech’s Consolidated revenue stood at ₹28,057 crore, rising 6.7% from a year earlier and down 1.6% sequentially. The Noida-based firm attributed it to a “seasonally weak quarter” and just like its larger peer Tata Consultancy Services (TCS), the company signalled that discretionary spend is unlikely to be very different from the last fiscal. “Although some actions show that things could have bottomed out, I do not want to take that call because there have been so many false starts in the last year to when the recovery will happen,” C Vijayakumar, CEO and MD, of HCLTech said.
Operating margin contracted to 17.1% from 17.6% in the March quarter. HCLTech had given a revenue guidance of 3-5% for FY25, and maintained margin guidance at 18-19% for the current fiscal, unchanged from FY24. Vijayakumar expects to meet the margin guidance saying the company generally sees higher margins in Q3, which will offset the slow growth seen in early part of this fiscal.Prateek Aggarwal, chief financial officer, HCLTech, said, “Our cash flow generation remains robust with the last twelve months free cash flow at ₹21,637 crore, 133% of PAT and 88% of EBITDA.” Giving an outlook he said “We expect to grow in Q2 with all verticals and geographies seeing a sequential growth except financial services. We shall have the planned impact of State Street divestiture on revenue in Q2 and including that impact, we remain comfortable with a full year revenue and margin guidance as clients spend on GenAI and other emerging technologies are seeing some traction.”