Wipro Ltd and HCL Technologies Ltd are all set to announce their December quarter results on Friday, a day after the top two IT firms by sales Tata Consultancy Ltd and Infosys Ltd came out with their Q3 results. The results by TCS and Infosys triggered a strong buying interest in IT names on Friday morning, including in shares of Wipro and HCL Tech, making small investors wonder whether the two would report better than expected results later in the day.
Wipro is seen reporting a double digit fall in net profit for the December quarter while HCL Tech is expected to report a single digit rise in profit. In the case of Wipro, the numbers would be impacted by one-month wage hike and furloughs which could, to an extent, be offset by operational efficiencies. In the case of HCL Tech, the IT firm is expected to outshine peers with sequential CC revenue growth, led by both Services business -- buoyed by Verizon deal and favourable seasonality for its products business.
In the case of HCL Tech, PhillipCapital pegged profit at Rs 4,258.50 crore, up 4 per cent over Rs 4,096 crore YoY. It sees sales rising 5.1 per cent YoY to Rs 28,067 crore against Rs 26,700 crore YoY. Dollar revenues are seen at $3,369, up 4.5 per cent QoQ while growth in CC terms is seen at 4.9 per cent. Ebit margin is seen at 19.2 per cent. PhillipCapital expects HCL Tech to retain its FY24 revenue guidance of 5-6 per cent in CC terms and Ebit margin guidance for 18-19 per cent.
For Wipro, the same brokerage sees profit at Rs 2,688 crore, down 11.9 per cent. It sees revenue falling 4.5 per cent YoY to Rs 22,191 crore. Dollar revenue is seen falling 2.5 per cent while sales in CC terms is expected to fall 2.5 per cent QoQ. It expects Wipro to guidance for IT services CC revenue growth of minus 1 per cent to 1 per cent for the March quarter.
"We anticipate sequential revenue growth of 4.8 per cent in CC terms. This is backed by solid demand in ER&D business and strong seasonal growth for product business (30% QoQ growth), which may drive revenue growth. We expect traction of 1.9 per cent in the services business from Verizon deal. However, higher furloughs in Hi-Tech and BFSI could drag down growth," Elara said on HCL Tech.
On Wipro, this brokerage said: an "anticipate a sequential CC revenue contraction of 1.5%, in the lower end of the guided range of -2% to +1%. Growth pull-back continues for the mortgage business in BFSI, and tepid macro may weigh on sequential growth with furlough in Q3," it said.
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