HCL Technologies' third quarter (January-March) profit after tax is seen falling 6.16 percent sequentially to Rs 1,797 crore from Rs 1,915 crore on adverse cross currency impact, according to a CNBC-TV18 poll.
However, analysts believe India's fourth largest IT exporter may beat its peers on dollar revenues front. They expect dollar revenues to grow 0.7 percent quarter-on-quarter to USD 1,501.5 million and in constant currency, the growth may be 3 percent. (Its rival and top IT exporter TCS reported a 0.8 percent decline in dollar revenues in March quarter and in constant currency, the growth was 1.6 percent)
HCL Tech, in its pre-quarter earnings briefing note for investors and analysts on March 31, already said since the company’s revenues are derived in multiple currencies and significant costs are incurred in INR, the revenues and EBIT for the quarter to be reported in US Dollar would have adverse impact of around 280 basis points and around 80 basis points, respectively.
During March quarter, US Dollar continued to strengthen against almost all global currencies.
However, in spite of the adverse impact of exchange rate movement, the company is confident of achieving earnings before interest and tax (EBIT) in the range of 21-22 percent for this quarter, it added.
Rupee revenues are likely to increase 0.3 percent to Rs 9,312 crore in March quarter from Rs 9,283 crore in previous quarter.
Analysts expect EBIT to fall 4.84 percent sequentially to Rs 2,103 crore and margin to decline 122 basis points to 22.58 percent in March quarter, impacted by cross currency and wages hikes.
The company follows July-June as its financial year. It positively surprised the street with its earnings in Q2FY15 with a dollar revenue growth of 4 percent and margins maintained at 23.8 percent (against 23.9 percent Q-o-Q).
In March quarter, analysts expect forex loss of USD 5.5 million.
Key things to watch out for are sustained pick up in engineering services (Q2 growth was 12.6 percent, Q1 at 8.1 percent); infrastructure management services growth (Q2 at 6.2 percent, Q1 at 3.6 percent after slowing down in the prior quarters); cash & cash balances (at USD 1.6 billion); and deal wins (which were at USD 1 billion or plus for 8 consecutive quarters).
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