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HCL Tech Q3 preview | Brokerages expect stable numbers; revenue, EBITDA likely to be healthy

Brokerage firm Edelweiss Securities expects an 11.3 percent year-on-year (YoY) rise in core PAT in HCL Tech's Q3FY20 at Rs 2,922.9 crore.

January 17, 2020 / 09:02 AM IST
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HCL Technologies will release its December quarter earnings on January 17 and most analysts expect a stable set of numbers.

Brokerages say the outlook on demand in infrastructure management services (IMS), engineering and R&D services, and integration of IBM's products will be key things to watch in the IT major’s Q3FY20 scorecard.

Brokerage firm Edelweiss Securities expects an 11.3 percent year-on-year (YoY) rise in core PAT at Rs 2,922.9 crore. Sequentially, it is seen as a 9.9 percent growth.

EBITDA can climb 19.4 percent YoY and 6.2 percent QoQ to Rs 4,355.5 crore, while revenue for Q3 may be at Rs 18,159.2 crore, up 15.7 percent YoY or 3.6 percent QoQ, Edelweiss Securities said.

In constant currency (CC) terms, Edelweiss expects HCL Tech's revenues to grow by 2.4 percent QoQ.


"Cross-currency tailwinds of 25bps should help HCL post USD growth rate of 2.6 percent. We expect HCL tech's margins to marginally decline (30bps), as gains from the absence of wage hikes and weak rupee are offset by higher amortisation expenses," Edelweiss Securities said.

Motilal Oswal Financial Services expects a 16.7 percent YoY growth in HCL Tech's Q3 revenue at Rs 18,324.9 crore, while adjusted PAT is expected to rise 8.9 percent YoY or 7.2 percent QoQ to Rs 2,842.9 crore.

The EBITDA margin is likely to come at 24.9 percent for Q3FY20, the brokerage estimates.

Brokerage firm Kotak Securities expects CC revenue growth rate of 1 percent on a sequential basis and nearly 15 percent on YoY basis.

"Revenue growth includes an inorganic component of 5.5 percent on YoY comparison. We expect a marginal decline in EBIT margin due to wage revision impact and normalization of profitability in the ER&D segment," it  said.

"Revenue may rise 14.5 percent YoY to Rs 17,973.5 crore while reported PAT can inch up by 1.4 percent YoY to Rs 2,631.5 crore."

Kotak expects HCL Tech to retain 15-17 percent CC revenue growth guidance for FY2020E.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Jan 17, 2020 09:02 am

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