HCL Technologies Q3 PAT seen up 8.6% at Rs 430 cr

India's fourth largest IT software services exporter HCL Technologies is set to report 8.6% growth in its third quarter consolidated net profit of Rs 430 crore as against Rs 400 crore in the quarter ended December 2010, as per US GAAP.

Revenues are seen going up to Rs 4,090 crore from Rs 3,888.4 crore. Earning before interest and tax (EBIT) is expected to go up at Rs 557.48 crore from Rs 510.8 crore.

EBITDA is also seen going up at Rs 699.2 crore versus Rs 634.7 crore (QoQ).

EBIT margin is likely to improve at 13.63% versus 13.1% and EBITDA margin is seen at 17.09% versus 16.32%.

Expectations
-Impact of 40 bps from Japan and 30 bps from BPO hive-off on topline expected
-Expect management to reiterate the Q4FY11 margin guidance
-Expect growth to be led equally by application services and IMS.
-Expect forex loss of $ 0.6 million versus $ 3 million in December 2010 quarter

Things to watch
-Large deal wins/deal pipeline; growth in ES revenues and margin impact
-Revenue growth and margin trend in IMS business; progress on BPO restructuring
-Quarterly annualized attrition trend, hiring profile (proportion of lateral hires)
-The overall demand outlook, update on the European region and uptick in the discretionary spend
-Update on the BPO business (earlier the management had indicated a loss of $6 million per quarter for the next four quarters).