HCL Technologies has retained its full year guidance, saying revenue in FY18 is expected to grow between 10.5-12.5 percent in constant currency and EBIT margin guidance maintained at 19.5-20.5 percent.
The software solutions provider first quarter profit fell sharply by 6.6 percent sequentially to Rs 2,171 crore, impacted by lower revenue growth and higher tax cost but better operational performance capped degrowth. Revenue during the quarter grew by 0.8 percent to Rs 12,149 crore and dollar revenue rose by 3.7 percent to USD 1,884.2 million on sequential basis.
Anil Chanana, CFO and Karan Puri, Sr CVP of HCL Technologies in an interview to CNBC-TV18 spoke about the first quarter performance and the outlook going forward.
Puri said traditionally second half for the company has been where deals shore up and that is likely to continue this year as well.
However, the nature of deals we are looking at in the first half are in Mode 2- that is do a pilot and if that works well then there are spate of new projects coming downstream, said Puri, adding that it effectively may not be in the form of deal but more in form of billing. “So lot of Mode 2 in H1 and then fair amount of deals getting structured in H2,” he said.
Puri said they were on almost 100 percent renewal rate for traditional deals this quarter, so there is a strong driver of business rolling over in terms of Mode 1.
Meanwhile, Chanana said they as of now would stick to the constant currency and EBITDA margin guidance range as stated above. Wage increases are all factored-in in the guidance, he added.
Talking about the IBM deal, Chanana said it has been expanded by another USD 140 million and so, expect USD 30-35 million addition on annual revenues from IBM IP deal expansion in the current quarter, he said.
The decline seen in Europe was mainly due to one instance of BPO deal being restructured as well as one infrastructure client being restructured, said Chanana.
For full discussion, watch video
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