HCL Tech Q3 Results Review - HCL Software Springs A Positive Surprise: Nirmal Bang

Nirmal Bang Report

HCL Technologies Ltd. in Q3 FY23 delivered CC QoQ revenue growth of 5% (13.1% YoY), much above the 3% growth that we were estimating, largely driven by the 30.5% QoQ growth delivered by HCL Software (products and platforms business). We were assuming a 10- 15% growth for P&P.

Ebit margin expanded by ~165 basis points QoQ against our estimate of 60 bps expansion, largely driven by the significant P&P outperformance (higher margin).

HCL Tech has reduced the revenue growth guidance for FY23 to 13.5-14% in constant currency terms on the back of higher-than-expected furloughs in the services business.

This has been lowered from 13.5%- 14.5% indicated post 2QFY23. Ebit margin guidance has been narrowed to 18-18.5% from the previous 18-19%.

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More Research Reports On HCL Tech's Q3 FY23 Results Review

• Revenue, Margin Beat Driven By HCL Software: Centrum Broking

• Good Performance, Valuation Attractive: Motilal Oswal

• Product, ER&D Key Drag Due To Macro Challenges: IDBI Capital

• Strong Seasonality In Software Segment Drove Financial Performance: Yes Securities

• Software Shines; Solid Beat Across Lines; Retains Guidance: Dolat Capital

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