HCL Technologies Q4 results preview, dividend: Margin to fall sharply QoQ; guidance in 4-7% range likely

HCL Technologies Ltd (HCL Tech) is likely to report 1-6 per cent year-on-year (YoY) rise in profit growth for the March quarter on a single-digit rise in sales. The IT major is expected to see a margin decline 150 basis points sequentially, owing to seasonality in its products business. Analysts are largely expecting HCL Tech to give FY25 revenue guidance of 4-7 per cent in constant currency (CC) terms with slight improvement in management commentary.  

Sharekhan sees HCL Tech reporting 1.3 per cent YoY rise in profit at Rs 4,033 crore against Rs 3,981 crore YoY. It sees sales jumping 7 per cent YoY to Rs 28,468 rcore from Rs 26,606 crore. Margin is seen 146 basis points YoY to 22.3 per cent.

"HCL Tech is expected to report sequential revenue growth of 0.2 per cent in CC terms as incremental revenues from telecom contract and deal ramp ups may be offset by seasonal weakness in products. EBIT margin to decline by 150 bps QoQ largely due to decline in products business," Sharekhan said.

Nomura India expects HCL Tech to report a CC revenue growth of 0.2 per cent QoQ. One month revenue contribution from Verizon deal would partly be negated by a seasonally weak quarter in product business, it said.

This brokerage expects HCL Tech to guide for 5-7 per cent YoY revenue growth in CC terms with a 18-19 per cent EBIT margin band for FY25. For the context, the revised FY24 guidance of HCL Tech is 5-5.5 pre cent YoY revenue growth (including 100 bps inorganic) with an 18-19 per cent EBIT margin.

For HCL, Nirmal Bang sees TCV to come in the guided range on the back of a healthy pipeline. Nirmal Bang sees HCL Tech holding out revenue growth guidance for FY25 of 4-7 per cent in CC terms. It expects margin guidance to be similar to FY24 (18-19 per cent EBIT).

This brokerage sees profit at Rs 4228 crore, up 6.2 per cent. Sales are seen at Rs 28,628 crore, up 7.6 per cent YoY. This brokerage sees Ebit margin at 18.6 per cent.