HCLTech Q4 Preview: Profit, Margin Likely To Dip; Revenue Growth To Be Muted

HCL Technologies Ltd.'s net profit is likely to decline in the quarter ended March 2025, amid a weak demand environment, as per the consensus estimate of analysts tracked by Bloomberg.

The information technology major's revenue is expected to rise marginally by 1% on a sequential basis to Rs 30,262 crore, according to the estimate. The bottomline is estimated at Rs 4,339 crore, which could mark a 6% sequential decline.

The company is scheduled to declare the quarterly results on Tuesday, April 22.

• Revenue seen 1% higher at Rs 30,262 crore versus Rs 29,838 crore.

• EBIT seen 5% lower at Rs 5,548 crore versus Rs 5,827 crore.

• EBIT margin seen at 18.33% versus 19.52%.

• Profit seen 6% lower at Rs 4,339 crore versus Rs 4,594 crore.

Nuvama expects a sequential revenue decline of 0.7% in constant currency and 1.3% in dollar terms. The services revenue is expected to rise by 0.5%, whereas the earnings from products and platforms segment is likely to decline 15% quarter-on-quarter, according to the brokerage.

HCLTech's services business will be supported by two months of inorganic contribution, it stated, while adding that the EBIT margin is likely to fall by 170 basis points sequentially to seasonality in products and platforms segment. "We expect HCLT to guide FY26 revenue growth (3-5% CC YoY growth in Services) and margin (18-19%),” it said.

The IT firm's margins are likely to decrease by 80-100 basis points sequentially due to wage hike announced, according to Deven Choksey. The margin, however, will be supported to some extent by improved utilisation and better operating leverage partially offset, it added.

Citi Research expects IT services revenue to grow 1% sequentially in constant currency terms. Overall margins are likely to slip on a quarter-on-quarter basis, largely led by the decline in P&P segment, it added. In terms of deal wins, the financial services firm expects HCLTech's total contract value to likely be stable at $2-2.3 billion.

Kotak Institutional Equities forecasts a revenue decline of 0.7% due to seasonal weakness in the products business, and 0.9% growth in services business.

“We forecast EBIT margin of 18.2%, an increase of 60 bps yoy and decline of 140 bps qoq. The decline qoq is due to lower license revenues from the products business. We forecast TCV of net new deals at US$2.2 billion, similar to earlier quarters. We believe HCLTech will guide for 3-5% revenue growth. The guidance will include 100 bps contribution from CTG acquisition,” it said.

Key Things To Watch

• Impact of macroeconomic environment

• Commentary on discretionary spending

• Margin Levers

• Deal pipeline and conversion

A day ahead of the release of fourth quarter results, shares of HCLTech closed 2.92% higher at Rs 1480.1 apiece on the BSE, compared to a 1.09% rise in the benchmark Sensex.