HCL Tech Q3 dollar revenue seen up 2.6%, FY18 guidance could be maintained

IT firm HCL Technologies' third quarter profit is seen falling 2.4 percent sequentially to Rs 2,135 crore compared to Rs 2,188 crore in previous quarter, but topline is expected to be better.

Revenue in rupee terms during the quarter could grow 2.8 percent to Rs 12,788 crore and topline in dollar terms is expected to increase 2.6 percent to USD 1,978 million compared to previous quarter, with constant currency growth at 2.5 percent, according to average of estimates of analysts polled by CNBC-TV18.

Analysts feel growth will be aided by IBM IP partnership (V and VI) and full quarter consolidation of Urban Fulfillment acquisition.

The recovery is likely in application & engineering business.

Earnings before interest and tax (EBIT) is seen rising 2.8 percent quarter-on-quarter to Rs 2,519 crore, but margin may be flat at 19.7 percent for the quarter.

Partial wage hike during the quarter might impact margin; but may be offset by benefits from IP deals.

Analysts expect FY18 constant currency revenue growth guidance to be maintained at 10.5-12.5 percent and EBIT margin at 19.5-20.5 percent. FY18 constant currency guidance translates to 12.1-14.1 percent in dollar terms.

Key things to watch out for would be:

Organic growth

Performance in IMS segment and commentary

Outlook and automation impact on mode-1 services

Commentary on IP deal updates and digital

Guidance