HCLTech Share Price Dips After One-Time Hit On Q3 Net Profit

Shares of HCL Technologies Ltd. are in focus today, after the company's net profit fell sequentially in the third quarter of the current financial year due to a one-time impact of new labour codes.

The stock is trading over 1.6% lower, at Rs 1,639.90 apiece. It has also fallen nearly 18% in the past 12 months. Of the 47 analysts, tracked by Bloomberg, who have coverage on this stock, 23 analysts have a 'buy' call, 16 have a 'hold' view, and eight have a 'sell' call on the stock.

The IT giant reported a consolidated bottom-line of Rs 4,076 crore in the October-December period, compared to Rs 4,235 crore in the preceding quarter, according to an exchange filing on Monday.

HCLTech Q3 Results (Consolidated, QoQ)

• Revenue up 6% at Rs 33,872 crore versus Rs 31,942 crore (Estimate of Rs 33,201 crore).

• Net profit down 3.8% at Rs 4,076 crore versus Rs 4,235 crore (Estimate of Rs 4,702 crore).

• EBIT up 14.2% at Rs 6,285 crore versus Rs 5,502 crore (Estimate of Rs 6,054 crore).

• EBIT margin at 18.6% versus 17.2% (Estimate of 18.2%).

• The operating margin included a 81 basis points impact of restructuring cost.

New Labour Codes Impact

The implementation of the New Labour Codes led to a one-time increase in employee benefit provisions, estimated at Rs 956 crore, according to the statement.

HCTech reported a nearly 20% quarter-on-quarter growth in revenue from its advanced artificial intelligence segment, reaching $146 million in constant currency.

The company's order book expanded by 17% sequentially and 43% year-on-year, totaling $3 billion in the third quarter.

Among business units, HCLSoftware delivered the strongest performance with a 28.1% rise, while the IT services segment recorded a 1.5% increase on a QoQ constant currency basis.

Guidance Outlook

HCLTech has revised its full-year revenue growth guidance in constant currency terms to a narrower range of 4%–4.5%, compared to the earlier projection of 3%–5%.

The company has also upgraded its services revenue growth outlook to 4.75%–5.25%, up from the previous estimate of 4%–5%. Meanwhile, the EBIT margin guidance remains unchanged at 17%–18%, excluding the one-time impact of the new labour codes.