Q2FY23 Preview: HCL Technologies: Revenue seen at Rs244,760 million, PAT at Rs33,711 million

11 Oct 2022 , 01:49 PM

Result date: 12^th October, 2022
Recommendation: Add
Target price: Rs1,000

Continued momentum in the services segment is likely to drive performance of HCL Technologies during the September 2022 quarter. Analysts at IIFL Capital Services forecast 3.4% sequential growth in constant currency revenue growth for Q2, led by continued strength in services partially offset by seasonality in products.

They expect HCL Technologies to retain its guidance of 12-14% growth in constant currency revenue and 18-20% EBIT margin guidance for FY23. The company’s margins could expand by 40 basis points sequentially, despite impact of partial wage hikes.

Important management insights to watch out for:

• FY23 growth outlook across the 3 segments, including potential Q3 seasonality in Products business
• FY23 margin outlook and levers
• Impact of ongoing macro concerns on demand
• Attrition and hiring trends

	September 2022 estimates	QoQ change	YoY change
Revenue (US$ mn)	3,067	1.4%	9.9%
Revenue (Rs. mn)	244,760	4.3%	18.5%
EBIT (Rs. mn)	42,559	6.6%	8.7%
EBIT margin	17.4%	40 bps	(160) bps
Profit After Tax (Rs. mn)	33,711	7.2%	3.3%
EPS (Rs.)	12.4	7.2%	3.5%

Source: IIFL Research