HCLTech raises FY25 revenue guidance, planned contractual reductions in Q4 caps revision

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.