HCLTech to see a 2% drop in revenue in Q1FY25; CFO gives guidance

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HCLTechnologies issued a negative 2 percent revenue growth guidance for Q1FY25 citing offshoring impact on a large project, said the management in its Q4FY24 conference call on April 26.

Prateek Aggarwal,  chief financial officer of HCLTechnologies said, "There is the usual annual productivity pass back for a large number of our clients and the same impact would be seen this year as well." He further said that beyond the annual productivity part, there is an offshoring impact in one of the largest project which is expected to lower the Q1FY25 revenues by 2 percent.

The drop in revenues will however be higher in Q1FY25. The revenue number a year back in the same period fell 1.3 percent.

Also Read | Q4 results highlights: HCLTech net profit falls 8% QoQ; CEO Vijayakumar holds optimistic view for FY25

Offshoring is when a business process is done from a company in one country to the same company in another country. It is not the same as outsourcing, which is the movement of internal business processes to an external organisational unit.

The company slashed its constant currency revenue growth guidance for FY25 to be between 3-5 percent, down from 5-5.5 percent in FY24. Operating or EBIT margins guidance was kept the same as FY24 at 18-19 percent.

The company reported a net profit of Rs 3,986 crore in Q4FY24, a 0.1 percent increase on a YoY basis. It posted a 7.1 percent increase YoY in revenue at Rs 28,499 crore in Q4FY24. Both revenue and net profit missed Moneycontrol estimates by a small margin.