HCL Tech Q1 profit seen down 2% at Rs 1884 cr: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the technology sector. The brokerage house expects HCL Technologies to report a 2.1 percent degrowth quarter-on-quarter (growth of 5.7 percent year-on-year) in net profit at Rs 1883.9 crore.Sales are expected to increase by 4.5 percent Q-o-Q (up 14.4 percent Y-o-Y) to Rs 11184.5 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 2.7 percent Q-o-Q (up 10.2 percent Y-o-Y) to Rs 2,314 crore.Motilal Oswal's report on HCL Technologies
We expect HCLT’s USD revenue to grow 5.3 percent Q-o-Q in 1QFY17 and 5 percent Q-o-Q on a constant currency basis. Impact from cross currencies should add 30bp to revenue growth. Organic growth of 2.5 percent Q-o-Q CC, would be summed up by the following factors: [1] Ramp up in IMS deals, [2] Commencement of revenue from the Volvo deal, [3] Pressure of insourcing at a major client. The remainder would be contributed to by the external IT business of Volvo that HCLT acquired. Given the lower margin of the external IT business of Volvo and investments in visas, margins are expected to decline by 150bp Q-o-Q to 20.7 percent. PAT estimate for the quarter is Rs 18.8b, -2 percent Q-o-Q, on the back of lower margins.

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