HCL Tech expects 2% growth for the rest of the year despite a hard knock in Q1 and no new large clients
- HCL Technologies has reported a quarterly dip of 7.2% in its revenues during the first three months of the current financial year.
- The hit to its revenue is greater than that experienced by its peers — Tata Consultancy Services (TCS), Wipro and Infosys.
- The company has issued annual guidance of 1.5% to 2.5% increase in revenue and an operating margin of between 19.5% to 20.5%.
- For the 70th consecutive quarter, it will also be rolling out a dividend of ₹2 per share to its stockholders.
Even though the company has signed 11 new deals in the last three months, the number of large clients — customers bigger than $100 million — has not increased. This is on the backdrop of more than 30% of HCL Tech’s revenue coming from its top 20 clients.
The company’s fall in revenue is greater than that of its peers — Tata Consultancy Services (TCS), Wipro and Infosys — who have already shared their first-quarter results.
HCL Technologies’ outlook
Despite analysts expecting the contrary, the company has issued guidance of 1.5% to 2.5% increase in revenue for the next three quarters and an operating margin of between 19.5% to 20.5% for the year.
“HCL’s margin resilience and cash generation prowess was highlighted this quarter, despite the COVID-led impact to the top line,” said HCL Technologies’ CFO Prateek Agarwal.
The company has signed 11 new deals in the last three months led by telecommunications, financial services, manufacturing, life sciences and healthcare. “New booking total contract value (TCV) is higher compared to the last year,” said the company in its filings.
“We are seeing a robust demand environment and a strong pipeline which gives us confidence in our growth trajectory going forward,” added HCL Technologies president and CEO C Vijaykumar.
HCL Technologies has also announced a dividend of ₹2 per share marking its 70th consecutive quarter of a dividend payout.
Infosys is still on the fence when it comes to making work from home a permanent change
Infosys gives annual guidance of up to 2% growth this year as profit plummets by 4.8% and revenue dips 2% in Q1
Here’s what to expect from HCL Tech earnings
Popular on BI
- I took a new job in a remote location after my divorce. There aren't many people to date, but I'm happy staying single.
- Elon Musk hits out at viral videos of DINK couples, saying there's an 'awful morality' to those who choose not to have children
- Married couples often share high blood pressure, study shows
- 8 Irresistible seasonal snacks to warm your winter days
- Vijay Shekhar Sharma says 'Wed in India' is a good idea for its food options
- NCLAT stays CCI penalty on NTPC in Ratnagiri Gas & Power shares issue
- A Japanese Start-Up Is Testing a Rocket Powered Entirely By Rocket Fuel Created From Cow Dung!
- Amazon sues scammers for stealing millions of dollars via fake returns