HCL Tech Q1 preview: IT major likely to give revenue guidance of 6.5–8.5% for FY24

HCL Tech Q1 preview: HCL Technologies, the Noida-headquartered IT services company, is also slated to announce its June quarter numbers (Q1FY24) today (July 12), along with peer Tata Consultancy Services (TCS). The C Vijayakumar-led company is expected to post consolidated revenue of Rs 26,750 crore, up 0.5 per cent on a sequential basis. Revenue in dollar terms is seen at $325 crore, up 0.5 per cent quarter-on-quarter (QoQ), as per Zee Business Research desk. In constant currency (CC) terms, the company's revenue is seen increasing by 0.1 per cent QoQ. 

The company's earnings before interest and taxes (EBIT) are expected to rise 1 per cent QoQ to Rs 4,885 crore while the EBIT margin is seen at 18.3 per cent against 18.2 per cent in the previous quarter (Q4FY23). Profit after tax or PAT is seen declining 3.1 per cent QoQ at Rs 3,860 crore against Rs 3,983 registered in the last quarter.

The company's revenue is expected to be flat due to a slowdown in small deal wins and the cancellation of projects in Engineering Research & Development (ER&D), according to the research desk. Further, HCL Tech's IT Services segment is expected to see 1.7 per cent growth in revenue, while products and platforms (P&P) are estimated to see 1 per cent growth. On the other hand, ER&D is estimated to see a fall of 4 per cent. 

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For the full fiscal year (FY23–24), HCL Tech is expected to give revenue guidance of 6.5–8.5 per cent and margin guidance of 18–19 per cent. Key monitorables include ER&D/Products business and outlook on deal total contract value (TCV).

HCL Tech share price

Over the last three months, the stock has gained 2.5 per cent. In comparison, the Nifty IT index has risen 2.26 per cent while the NSE Nifty has jumped nearly 10 per cent, Trendlyne data show.

HCL Tech, Microsoft expand partnership

Last month, HCL Tech and Microsoft announced the expansion of their strategic partnership to help enterprises harness generative artificial intelligence (AI) and develop joint solutions to enable businesses to achieve better outcomes.

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HCL Tech will establish a Microsoft Cloud Generative AI Centre of Excellence, according to a statement. This will be focused on developing industry-specific solutions, leveraging the power of generative AI to offer personalised and data-driven experiences to customers, improving decision-making processes, and driving business growth.

With HCL Tech's domain expertise across industries and Microsoft's Azure Open AI Service, clients will benefit from innovative solutions that enhance employee productivity, streamline IT operations, accelerate application development, and optimise business processes, the statement added.