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Published 21:05 IST, April 26th 2024

HCLTech's Q4 revenue falls short and forecasts modest growth

The company indicated that it anticipates persisting macroeconomic volatility.

Reported by: Business Desk
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HCLTech's Q4 revenue falls short and forecasts modest growth | Image: HCLTech
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HCLTech's Q4: HCL Technologies, an IT services provider, unveiled its fourth-quarter earnings report on Friday, surprising analysts with slightly lower revenue figures amid ongoing macroeconomic uncertainties. The company indicated that it anticipates the persisting macroeconomic volatility, linked to demand, to extend into fiscal year 2025.

The company's quarterly revenue climbed by 7.1 per cent to $3.42 billion for the period ending March 31, falling just short of analysts' expectations of Rs 286.07 billion, as per data from the London Stock Exchange Group (LSEG). Notably, its technology and services segment experienced an 8.7 per cent year-on-year decline, while the healthcare and life sciences segment saw a 1 per cent drop.

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Looking ahead to fiscal year 2025, HCLTech forecasted a revenue growth range of 3 per cent to 5 per cent, a projection that fell below market forecasts.

CEO C Vijayakumar remarked, "Broader macro continues to be quite volatile. We are cautiously optimistic and assume a similar macro environment that we saw in fiscal 2024 to also be there for a predominant part of fiscal 2025."

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The IT industry's focus on cost reduction amid restrained client spending on non-essential services like software upgrades, cloud services, and consulting has been highlighted by recent deals. Moreover, the uncertain macroeconomic climate and geopolitical tensions have contributed to subdued demand within India's $254 billion IT sector.

Analyst Devang Bhatt from IDBI Capital noted, "The annual guidance is a tad lower, as we were expecting 4 to 6 per cent. Like fiscal 2024, large deals should offer a helping hand to retain its pole position (in terms of revenue growth) among the top 5 this year."

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HCLTech's quarterly net profit remained stagnant at Rs 39.86 billion, compared to the corresponding period last year, missing analysts' estimates of 41.10 billion rupees, according to LSEG data. The company reported new deal wins totaling $2.29 billion, marking an increase from the previous quarter's $1.93 billion and the year-ago period's $2.07 billion.

(with Reuters inputs)

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21:05 IST, April 26th 2024