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Yes Securities Report
HCL Technologies Ltd. reported strong sequential performance. Both, revenue and operating margin were above estimates. The services segment (88% of revenue) grew by 2.2% QoQ in constant currency terms.
The software segment had strong quarter due to seasonality factors (grew 30.5% QoQ in CC terms). The revenue growth was led by strong performance in life science and healthcare vertical (up 5.5% QoQ in CC terms).
There was sequential improvement in Ebit margin (up 165 basis points QoQ) led by improving employee pyramid and strong performance in high margin software segment.
Employee attrition has started moderating as last twelve months attrition was down 210 bps QoQ to 23.8%.
We believe that the long-term demand story remains intact led by IT transformation and cost optimisation projects.
However, the macroeconomic factors in the U.S. and Europe remain concerning and that is reflected in clients being more watchful of the situation and consequently, we expect moderation in growth in near term.
HCL Tech is well on track to meet its targeted 18-18.5% Ebit margin guidance for FY23.
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More Research Reports On HCL Tech Q3 FY23 Results Rreview
Product, ER&D Key Drag Due To Macro Challenges: IDBI Capital
Software Shines; Solid Beat Across Lines; Retains Guidance: Dolat Capital
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