HCL Tech Q3 revenue growth likely at 2.7% with robust deal wins; company may revise full-year guidance

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26 Aug, 2025 12:21

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HCL Technologies, the third-largest IT services company by market capitalisation, is expected to report around 2.7 percent growth in constant currency revenue for the December quarter, with likely robust deal wins and an upward revision in full-year topline growth guidance. The company will announce its quarterly earnings on January 15.

The expectations by brokerages for revenue are higher than the guidance of 1.5-2.5 percent sequential growth provided by the company in October last year. The broad-based growth across verticals and geographies may support topline.

"We forecast constant currency sequential revenue growth of 2.7 percent, marginally ahead of the 1.5-2.5 percent growth guidance. Revenue growth will be broad-based across IT services, ERD and products. Growth will be partly aided by large deals and continued momentum in executing digital foundation deals," said Kotak Institutional Equities which expects 2 percent sequential growth in Q3 profit.

Kotak expects marginal revision to annual revenue growth guidance with potential for margin revision at the lower end of the band.

The current annual guidance stands at 0.5-1.3 percent for revenue growth and 20-21 percent for EBIT margin band.

The EBIT margin for the quarter ended December 2020 may decline 30-50 basis points due to wage revision.

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"EBIT margin is expected to decline by 42 bps QoQ due to partial wage revision. Net profit is expected to grow by 2 percent QoQ during the quarter," said Sharekhan.

Key things to watch for in HCL Tech Q3 results:
> Outlook on product business and progress on its renewals
> Outlook on demand environment in IMS and ERD businesses
> Margin trajectory given the pricing pressure
> Commentary on deal wins and deal pipeline
> Capital allocation policies including payout ratios and M&A activities
> Outcome of annual budgeting exercise and its implications
> Momentum and longevity of digital foundation programs