HCL Tech Q1 Results: Revenue and Net Profit Decline Expected
HCL Technologies Ltd is set to announce its Q1 FY2024-2025 results on July 12, amidst high anticipation from the market. The earnings season has kicked off with TCS, and now all eyes are on HCL Tech. According to an average of 10 estimates compiled by Moneycontrol, HCL Tech’s revenue is expected to see a 1% quarter-on-quarter decline, reaching Rs 28,094 crore. This anticipated drop in revenue is likely to adversely affect the net profit and EBIT margin of the IT giant.
Projected Financial Performance
HCL Tech’s net profit for the June quarter is projected to decrease by 3.7% quarter-on-quarter to Rs 3,838 crore. This decline is attributed to the expected fall in revenue and operating margin. Shares of HCL Tech have shown a surge, trading over 3% higher ahead of the earnings announcement. As of 14:38 pm, the stock was trading at Rs 1,561.5 on BSE and Rs 1,564.5 on NSE.
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Axis Securities’ Analysis
Axis Securities predicts a 1.6% decline in revenue for HCL Tech in rupee terms, with an operating margin contraction of 55 basis points. Key factors to watch include the deal TCV/deal pipeline, pricing scenario, and outlook on growth, operating margins, and the Products & Platforms (P&P) business.
Comparison with TCS
HCLTech’s rival, Tata Consultancy Services (TCS), reported its Q1 FY2024-2025 results recently, showcasing a 9% rise in net profit to Rs 12,040 crore and a 5% increase in revenue from operations to Rs 62,613 crore. Despite a contraction in operating margin due to wage hikes, TCS’s performance surpassed analysts’ predictions, leading to positive market sentiment.
Also Read : TCS Q1 Results: Net Profit Surges 9% to Rs 12,040 Crore; Declares Rs 10 Dividend
Market Reactions and Expert Opinions
Analysts have responded positively to TCS’s results, with firms like Jefferies, Nomura, and Nuvama revising their ratings and target prices upwards. This renewed confidence in the tech sector is likely to influence market expectations for HCL Tech as well.
Investor Sentiment
Investors are keenly watching HCL Tech’s Q1 results, especially given the broader market context. The sentiment remains cautious yet optimistic, as the IT sector navigates through economic uncertainties and evolving market dynamics. The upcoming earnings report will provide crucial insights into HCL Tech’s performance and strategic direction for the fiscal year.
Key Metrics to Watch
- Revenue Growth: Analysts predict a 1% decline in revenue.
- Net Profit: Expected to fall by 3.7% to Rs 3,838 crore.
- Operating Margin: Anticipated contraction of 55 basis points.
- Deal Pipeline: Monitoring the deal TCV and growth outlook.
Also Read : HDFC Bank Q1 Business Update: Significant Growth in Gross Advances and Deposits
Conclusion
As HCL Tech prepares to announce its Q1 FY2024-2025 results, the market is bracing for a potential decline in revenue and net profit. Despite these challenges, the IT giant remains a key player in the industry, and its strategic moves in the coming quarters will be closely scrutinized by investors and analysts alike.
For more detailed analysis and updates on HCL Tech’s financial performance, stay tuned to our coverage. [https://www.hcltech.com/].
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