Following its in-line Q3 earnings, information technology major HCLTech raised its revenue growth guidance in constant currency (CC) terms in the lower end by 100 basis points for the full fiscal year 2025. However, chief executive officer, C Vijayakumar revealed in a post earnings call that it was a planned reduction in mega telecom deal in Q4 and more time taken to ramp-up some discretionary deals that capped the revision in guidance.
After the revision, HCLTech's revenue growth guidance now stands at 4.5-5 percent after it was raised to 3.5-5 percent in the previous quarter. The services segment is expected to align with this growth, with a similar forecast of 4.5-5 percent on-year in constant currency terms. For Q4, HCLTech expects the growth in its services business to be in the range of -1.3 to +0.6 percent on quarter.
However, the company's EBIT margin guidance was retained at 18-19 percent for the full fiscal.
Aside from that, HCLTech's management commentary also aligned with that of industry peer Tata Consultancy Services which also released its Q3 numbers last week. Both the IT majors stated seeing improvement in discretionary demand and anticipate an uptick in client spending for IT services to grow in the medium-term.
Also Read | HCL's deal pipeline nears all-time high, growth across verticals seen this time: CEO C Vijayakumar
Vijayakumar disclosed that the company's deal pipeline is approaching its all-time high. Unlike the previous peak, propelled by a $2.1 billion mega-deal with Verizon Business, the current surge is driven by broad-based growth across multiple verticals.
He further stated that order books in both the Americas and Europe regions have reached record levels. "We observed strong growth in technology, retail, and consumer packaged goods services verticals," Vijayakumar said.
As for quarterly earnings, HCLTech's net profit for the quarter gone by grew 8.4 percent sequentially to Rs 4,591 crore while revenue rose 3.6 percent to Rs 29,890 crore. A Moneycontrol poll of nine brokerages pegged HCLTech's revenue at Rs 30,135 crore and consolidated net profit of Rs 4,596 crore in Q3.
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