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HCL Tech Q4 Results Preview: Analysts Predict Modest Profits; Key Focus on FY26 Guidance and Dividend Insights

HCL Tech Q4 Results Preview: Analysts Predict Modest Profits; Key Focus on FY26 Guidance and Dividend Insights

As the tech industry gears up for crucial financial disclosures, HCL Technologies is set to unveil its Q4 results on April 22, 2025. Following the earnings reports from major players like Tata Consultancy Services, Infosys, and Wipro, analysts predict that HCL will experience similar trends in both revenue and profit. The anticipated figures reflect ongoing challenges, primarily stemming from seasonal downturns and margin pressures in the sector.

HCL Tech’s Q4 Projections

Analysts expect HCL Tech to report revenues near ₹30,000 crore for the quarter, with an estimated profit of approximately ₹4,300 crore. According to average estimates from six brokerage firms, the company’s revenue could see a 5% year-over-year increase, while net profit might grow by 8% compared to the previous year.

  • Key Predictions:
    • Revenue: ₹30,000 crore
    • Net Profit: ₹4,300 crore
    • Year-over-Year Revenue Growth: 5%
    • Year-over-Year Net Profit Growth: 8%

Insights from Brokerage Firms

Kotak Institutional Equities has forecasted a 0.7% decline in constant currency revenue due to typical seasonal challenges within the products division. They project a 0.9% growth in the services sector and foresee a total contract value (TCV) for new deals at $2.2 billion, consistent with previous quarters.

  • Expected EBIT Margin: 18.2% (up 60 basis points year-over-year)
  • Quarterly EBIT Margin Decline: 140 basis points

Upcoming Earnings Announcement

On April 16, HCL Tech confirmed that it would release its financial results post-market closure on April 22. The management will engage in a conference call at 7:30 PM IST to discuss the financial outcomes and answer questions from analysts and investors.

Guidance for FY26

Looking ahead, analysts anticipate that HCL Tech will provide guidance for FY26 revenue growth between 3-5%, factoring in a 100 basis point contribution from the CTG acquisition. This translates to a compounded quarterly growth rate (CQGR) of 0.5-1.3%.

  • EBIT Margin Guidance: Expected to remain stable between 18-19%
See also  Samsung India Anticipates 20-25% Surge in Air Conditioner Demand This Year

Financial Trends and Challenges

HCL Tech’s revenue is expected to show a modest 1.6% sequential increase, reaching ₹30,356 crore in Q4FY25. However, in dollar terms, revenue may dip by 0.8% quarter-over-quarter. Analysts note that planned reductions in large telecom deals and seasonal weaknesses in product sales will contribute to these trends.

  • Revenue Growth Outlook:
    • InCred Equities: ₹30,439.10 crore
    • JM Financial: ₹29,986.40 crore
    • Sharekhan: ₹30,325 crore

Key Factors to Monitor

Market participants will closely watch several elements during the earnings announcement:

  1. Impact of macroeconomic conditions on decision-making.
  2. New deal TCV, which has remained modest.
  3. Potential revenue implications from the anniversary of the Verizon deal.
  4. Revenue growth in the June quarter, which is typically weak.
  5. The overall strength of discretionary spending.
  6. The operational environment necessary to achieve aspirational margins of 19-20%.

As HCL Tech prepares to share its quarterly results, stakeholders will be eager to assess how the company navigates current market challenges and positions itself for future growth.

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