HCL Technologies Ltd's Q4FY19 consolidated net profit declines 1.6% qoq to Rs2,568cr : Beats Estimates

The company’s consolidated revenue stood at Rs15,990 cr, up 1.9% qoq and 21.3% yoy.

May 09, 2019 10:05 IST India Infoline Research Team

HCL Technologies Ltd Q4FY19

Consolidated Results Q4FY19: (Rs in cr)

Q4FY19 QoQ (%)
Revenue 15,990 1.9
EBIT 3,039 [1.5]
EBIT Margin (%) 19 [65]
Net Profit (adjusted) 2,568 [1.6]
***EBIT margin change is bps
HCL Tech reported good set of numbers for Q4FY19. The top-line for the quarter grew by 1.9% qoq to Rs15,990cr, which is higher than the median consensus estimate of Rs15,924cr. Dollar revenue grew by 3.5% qoq to Rs2,278mn. EBIT came in at Rs3,039cr, down 1.5% qoq against median consensus estimate of Rs3,100cr. EBIT margins contracted by 65bps qoq to 19%. Reported PAT declined by 1.6% qoq to Rs2,568cr against median consensus estimates of Rs2,538cr.
  • Revenue in constant currency (cc) terms grew by 3.3% qoq.
  • Growth was led by Infrastructure Services (+7.3% qoq cc) on the back of strong deal wins in the past.
  • Mode 2, which is next-gen services, posted strong 14.3% qoq cc growth. Mode 3 (Products and Platforms) declined by 7.6% qoq cc despite Q4 being seasonally strong quarter for IP led revenues.
  • Applications Services (+5.2% qoq cc) also aided growth, while Business Services and ER&D declined by 5.8% qoq cc and 3% qoq cc, respectively.
  • Amongst verticals, growth was led by Public Services (+17.7% qoq cc). Financial Services (+0.9% qoq cc), Manufacturing (+2.5% qoq cc), Technology & Services (+3.9% qoq cc), Retail & CPG (+1.4% qoq cc), and Lifesciences & Healthcare (+3.5% qoq cc) aided growth. Telecommunications, Media, Publishing & Entertainment declined by 3.8% qoq on a higher base (from deal ramp ups, was up 35.4% qoq cc in Q3).
  • Geographically, Europe continued its strong run (+8.4% qoq cc) after 12.9% qoq cc growth in Q3 (H&D integration).  Americas was up 1.1% qoq cc and RoW was up 3.6% qoq cc.
  • HCL Tech has guided for cc revenue growth for FY20 at 14-16% and margin guidance at 18.5-19.5%.
  • HCL continued its strong deal win momentum in Q4, signing 17 transformational deals, reflecting a strong mix of Mode 1 and Mode 2 services.




Technical View:

HCL Technologies Ltd ended at Rs. 1,132.10, down by 0.1 points or 0.01% from its previous close of Rs. 1,132.20 on the BSE.
The scrip opened at Rs. 1,125.65 and touched a high and low of Rs. 1,144.20 and Rs. 1,111.05, respectively. A total of, 26,10,745 (NSE+BSE) shares have traded on the counter. The stock traded below its 50 DMA.

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