Q2FY24 Preview HCL Technologies: Revenues seen at Rs. 267,722 million, PAT at Rs. 36,801 million

10 Oct 2023 , 10:47 AM

Result date: October 12, 2023

Recommendation: Add

Target price: Rs. 1,270

Analysts at IIFL Capital Services are forecasting revenues of HCL Technologies to grow by 1.1% cc QoQ (+0.6% cc QoQ organic) in Q2, as IT Services growth remains muted. They expect margins to expand 50 basis points sequentially, driven by the delay in wage hikes for junior employees. They expect HCL Technologies to narrow down FY24 revenue growth guidance to 6-7% (from 6-8%) cc YoY and reiterate EBIT margin guidance of 18-19%. 

The company could post 4.4% sequential growth in its Profit After Tax (PAT). 

Important management insights to watch out for:

• FY24 revenue growth guidance
• Ramp-up schedule and margin impact of large deal win
• Deal win TCV and nature of deals
• Attrition and hiring trends

	September 2023 estimates	QoQ change	YoY change
Revenue (US$ mn)	3,237	1.2%	5.0%
Revenue (Rs. mn)	267,722	1.8%	8.5%
EBIT (Rs. mn)	46,752	4.8%	5.6%
EBIT margin	17.5%	50 bps	(50) bps
Profit After Tax (Rs. mn)	36,801	4.4%	7.3%
EPS (Rs.)	13.6	4.1%	7.2%

Source: IIFL Research