HCL Tech plunges 9% on lower than expected revenue in Q1

Not only that the company's dollar revenue growth was lower than its closest peers Infosys (3.2 percent) and TCS (6.4 percent). Even constant currency revenue growth of 3.2 percent was lower than Infosys at 3.9 percent and TCS at 7.4 percent.

However, HCL managed to beat street expectations on bottomline and operational front. Net profit grew by 2.1 percent sequentially (up 32 percent Y-o-Y) to Rs 1,873 crore during the quarter led by other income (growth of 70 percent Q-o-Q) and operational performance. Profit was expected at Rs 1,742 crore.

Earnings before interest and tax margin dipped 0.3 percent to 23.9 percent from 24.2 percent on sequential basis, but that was higher than estimates of 23.45 percent.

Apart from that, HCL has maintained its USD 1 billion deal wins target by signing 15 transformational engagements with more than USD 1 billion of total contract value in September quarter.

In an interview to CNBC-TV18, CEO Anant Gupta and CFO Anil Chanana said that the company remains focused on management of working capital and free cash flow generation. HCL will continue to invest in segments like ITO, engineering services and emerging digitalization, they said.

HCL expects utilisation rates to improve in the next few quarters. Blended utilisation rate for the quarter was at 82.7 percent, declined compared to 84.5 percent in previous quarter.

At 12:31 hours IST, the stock was quoting at Rs 1,513.20, down Rs 142.80, or 8.62 percent on the BSE.

Posted by Sunil Shankar Matkar