HCLTech is expected to report muted growth in the March quarter, with margins seen under pressure as seasonal weakness in the software business, wage hikes and restructuring costs weigh on profitability.
The constant currency growth for the quarter is expected in the range of a decline of 1.7% to 0.5%, according to analyst consencus estimates tracked by Bloomberg Net employee additions are estimated at 5,241. Bloomberg estimates also indicate FY26 revenue growth of 4.53% in constant currency terms and FY27 growth of 5.78%.
The March quarter is expected to reflect the reversal of software seasonality after a strong December quarter, while services growth in financial services and hi-tech may provide some support. The key focus this earnings season will be FY27 revenue and margin guidance, the pace of large deal wins, hiring trends, and whether restructuring costs begin to ease in the new financial year.
HCLTech Q4 Results Preview (Consolidated, QoQ, Bloomberg Estimates)
Revenue seen 1% higher at Rs 34,024 crore versus Rs 33,798 crore
EBIT seen 13% higher at Rs 5,977 crore versus Rs 6,285 crore.
EBIT Margin seen at 17.56% versus 18.59%
- Profit seen 15% higher at 4,648 crore versus Rs 4,054 crore.
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Here's what analysts are expecting from HCLTech Q4 results announcement:
DAM Capital
- Guidance implies a narrow range of services growth in constant currency terms, with estimates built around the midpoint.
- Software business expected to decline seasonally, with a higher base from the previous quarter adding pressure.
- Financial services and hi-tech expected to remain strong, while auto may stay weak.
- Engineering and research and development business seen more diversified, with hi-tech offsetting auto weakness.
- Deal wins expected to normalise after a stronger Q3.
- Margins expected to decline by around 100 basis points due to wage hikes and restructuring charges.
- Key watchpoints include software decline, revenue per employee trends and Middle East impact on FY27 outlook.
Citi
- Expects revenue to decline 1.5% quarter-on-quarter in constant currency due to software seasonality.
- IT services growth expected at 0.9% quarter-on-quarter in constant currency.
- Overall margins expected to decline by around 140 basis points due to software seasonality and currency impact.
- IT services margins expected to remain broadly flat, with wage hikes offset by currency support.
- Deal total contract value expected in the $2.2-2.6 billion range.
- Focus areas include FY27 revenue and margin outlook, deal wins, products and platforms, and engineering and research and development outlook.
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Goldman Sachs
- Overall revenue growth expected to slow sequentially due to reversal in software seasonality.
- Services growth expected to moderate from the previous quarter.
- Expects FY27 revenue growth guidance of 2%-5%.
- Margins expected to be impacted by reversal in software seasonality and residual wage-hike effect.
- Expects FY27 EBIT margin guidance of 18%-19%.
IDBI Capital
- Expects revenue to decline 1.5% due to seasonality.
- EBIT margin expected to contract by about 106 basis points due to wage revision and restructuring charges.
- Key focus areas include deal pipeline, pricing, hiring trends, margin outlook, AI-led deal impact and generative AI strategy.
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