HCL Tech Q2FY23 Results Preview: IT major may report good show – PAT likely to grow by 3%, margins to expand moderately

HCL Tech Result Q2FY23: Information and Technology (IT) major HCL Technologies may report good performance in the second quarter of the financial year 2022-23 (Q2FY23), Zee Business senior research analyst Varun Dubey said, while stating that the overall IT sector is expected to report healthy numbers during July-September quarter of this fiscal.

According to Dubey, HCL Tech’s revenue in rupee terms is expected to grow by 4.6 per cent quarter-on-quarter (Q-o-Q) to Rs 24,550 crore (estimate) against Rs 23,463 crore in Q1FY23. While in dollar terms, it may grow by 1.7 per cent to $307.5 crore (estimate) versus $302.5 crore Q-o-Q.

The third largest IT company with respect to market capitalization may report a 3 per cent growth in profit to Rs 3,380 crore (estimate) as compared to Rs 3,283 crore Q-o-Q. Whereas the EBIT (Earnings Before Income Tax) may surge by 6.5 per cent to Rs 4,250 crore (estimate) versus Rs 3,992 crore Q-o-Q.

HCL Tech may also show minor growth on the margins front as the analyst expects it to come to 17 per cent from 17.3 per cent QoQ. He said, “Wage hike impact on margins is likely, but not substantial.”

In constant currency terms, the revenue growth is seen at 3.7 per cent during the July-September quarter, Dubey said, adding, “R&D and IT services segment may show good growth in Q2, whereas P&P will be little muted. The key focus would be on guidance and management commentary.”

Q2FY23 is expected to be a reasonably strong growth quarter for Indian IT players given the challenging macroeconomic scenario in US/EU, Philip Capital said. It added that the growth momentum is expected to continue with Tier-II players outperforming Tier-I players yet again.

In line with Zee Business expectations, Philip Capital said, “Growth to be driven by R&D and IT services while P&P will remain muted. Margins are expected to expand moderately (+40bps) as HCL will have salary hikes spread over Q2 & Q3, to be offset by growth and operational efficiencies.”

Ahead of its results on October 12, 2022, HCL Tech's share price on Tuesday declined by around 2.5 per cent to Rs 938 apiece level on exchanges at the close as against around 1.5 per cent fall in Sensex and Nifty50.