HCL issues muted revenue growth forecast for FY24

HCLTech’s weak outlook follows disappointing earnings by TCS and Infosys.

The company's revenue from operations rose by about 18 per cent to Rs 26,606 crore during the reported quarter from Rs 22,597 crore in the March 2022 quarter. (file)

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HCL Technologies Thursday reported a consolidated net profit of Rs 3,983 crore, down 3% on a sequential basis. However, the company beat a Bloomberg consensus estimate of Rs 3,878 crore.

Revenue from operations during the quarter at Rs 26,606 crore was lower by 0.35% than the preceding quarter. Revenues were below the estimate which was pegged at Rs 26,823 crore by Bloomberg. The company’s Ebit at Rs 4,836 crore was down 7.5% compared to the preceding quarter, and lagged the estimate of Rs 6,039 crore.

During FY23, the company’s revenue crossed the Rs 1 trillion mark, which was up 18%.

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The company said that it expects its revenue to grow between 6-8% in constant currency terms in FY24. Margin guidance is 18-19%. The weak outlook followed disappointing earnings from market leader Tata Consultancy Services and No.2 Infosys Ltd’s forecast of single-digit revenue growth this financial year.

“Our pipeline is near all-time high, which reflects our differentiated business mix and strong client demand for our offerings. We have added 3,674 employees this quarter and overall employee strength has now grown beyond 225,000. All these set us well in FY24 for a healthy revenue growth in 6-8% range with operating margins in 18-19% range,” C Vijay Kumar, CEO and MD, HCL Tech said.

During the quarter, HCL Tech won 13 large deals, 10 in services and 3 in software. The total contract value stood at $2.07 billion, which was down 8% year-on-year.

The board of directors also declared an interim dividend of Rs 18 per share for FY24. —FE