HCLTech posted revenue of $3,533 million, 3.8% QoQ CC and 4.1% YoY CC (our estimate: at $3,561 million) with services revenue growth at 2.2% QoQ CC and 4.9% YoY CC, led by retail and consumer packaged goods (large program), technology and services and telecom, MP&E verticals (including CTG consolidation).
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HDFC Securities Institutional Equities
HCLTech Ltd. delivered an in-line revenue/margin performance. Revenue growth of 3.8% QoQ constant currency was supported by growth in services, CTG acquisition and software business seasonality. On expected lines, the company raised the lower-end of the guidance – revenue guidance at 4.5 to 5% CC for FY25E (versus 3.5 to 5% earlier).
The guidance implied a soft exit in Q4 impacted by completion of large program (retail and CPG vertical), planned reduction in Verizon deal, and lag impact of discretionary ramp-up. While the new deal total contract value remains soft at 2.1 billion (-5% QoQ and +9% YoY) and at a lower than targeted level of $2.3- 2.5 billion, the shorter deal duration may support near-term growth (annual contract value up more than 20% YoY). We maintain Add on HCLTech with a target price of Rs 2,010, based on 24 times FY27E.
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