HCLTECH MARGINS
Indian software sector earnings will remain modest in Q1: here’s why
Infosys and LTIMindtree are expected to lead a modest increase in average growth for Indian software service providers in the first quarter of FY25. However, previous top performers, Tata Consultancy Services (TCS) and HCLTech, may see pressure on profits and margins as they work to reignite growth.
IT industry's competitive intensity to be at highest levels in FY25: HCLTech CEO C Vijayakumar
Despite a challenging economic environment, HCLTech has achieved remarkable annual growth and outpaced larger competitors. The third-largest software services firm, with annual revenues of $13.27 billion, reported growth that outpaced Tata Consultancy Services 4.1% and Infosys 1.4%. Smaller players such as Wipro and Tech Mahindra faced significant struggles.
IT sweats to eke out margins on pricing squeeze, staff costs
Indian outsourcing companies face a margin squeeze in FY24 due to a triple threat: aggressive deal pricing, rising employee costs, and the pressure to boost revenue despite tight global budgets. Notably, Tata Consultancy Services (TCS), the industry leader, seems to be the only exception.
Infosys Jefferies' only IT pick on growth visibility, valuations
Jefferies downgraded its ratings on LTI Mindtree and Coforge to underperform on the back of rising uncertainty in their growth and margin outlooks.
Deals, hiring show HCL Tech can tap expected IT bounce
Revenue in the major markets of the US and Europe grew sequentially by 4.2% and 2.3%, respectively, while major business verticals also showed higher revenue. But what sets HCLTech apart from peers is the fact that it continued to add headcount during the quarter.
HCLTech bucks trend again, headcount rises by 2,725 employees
For the full year as well, Noida-headquartered HCLTech added 1,537 employees from overall headcount of 225,944 in March end 2023. Similarly in FY23, HCLTech’s headcount had shown an increase by 3,674 employees.
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CLSA upgrades TCS, two other IT majors, despite conservative outlook
Shares of TCS and HCLTech have been upgraded to “underperform” from “sell”. For TCS, the price target has been increased to Rs 4,043 from Rs 3,925, and for HCLTech, it has been raised marginally to Rs 1,553 from Rs 1,536.
Growth, profitability drive up TCS, HCLTech valuation
Among the Big Five, Tata Consultancy Services (TCS) and HCLTech have enriched the loyalists, literally. The other three - Infosys, Wipro and Tech Mahindra (TechM) – haven’t yielded anything for those sticking with them since April 2022.
IT gives bears a bull hug: what is driving the rally in tech stocks?
Despite muted earnings in the previous quarter and little expectations of major recovery in the next quarter, what is driving the rally in tech stocks? The answer lies in FY25, on which everyone is pinning their hopes.
IT may see a muted Q4; rebound likely in FY25: experts
The third-quarter performance of Indian IT majors such as TCS, Infosys, HCLTech and Wipro did not inspire much confidence. In Q3, Tata Consultancy Services posted a 4% increase in revenue and a 2% expansion in profit, while Infosys reported a 7.3% drop in profit. Meanwhile, Wipro’s profit fell 12% and HCLTech’s grew 6.2%.
It will take some time for client spending to revive: HCLTech's C Vijayakumar
In the absence of an immediate resumption in the expenditure cycle, HCLTech would harness deal conversions, a diversified R&D portfolio, and rising demand for generative AI to boost both its top and bottom-lines in the near term, Vijayakumar said in an interview.
Q3 results: HCLTech bucks trend, Wipro's woes continue
HCLTech, India's third-largest software exporter, outperformed expectations with a 6.2% rise in net profit and a 6.5% increase in revenues in Q3. Meanwhile, Wipro reported a steep 12% fall in profits and a 4.4% dip in revenue. HCLTech's success can be attributed to the $2.1-billion Verizon deal and an increase in headcount.
Byju’s big valuation cut by BlackRock; HCLTech, Wipro earnings a mixed bag
Happy Friday! Beleaguered edtech company Byju’s valuation has been slashed again – this time to $1 billion – by BlackRock, the world’s largest asset manager. This and more in today’s ETtech Top 5.
HCLTech, Wipro results today: Top watchlist for Dalal Street, trading strategy
HCLTech is expected to report strong earnings for the December quarter, while Wipro may continue to disappoint the market. HCLTech shares have rallied nearly 19% in the last quarter and are holding on to gains. Analysts expect HCLTech's revenue to rise 5% sequentially, and net profit to increase by 7%. Wipro is likely to see a decline in constant currency revenue growth due to furloughs and weak demand.
HCLTech Q3 results preview: Revenue to grow better than peers; company may retain FY24 guidance
The company is seen reporting a nearly 5% sequential rise in consolidated revenue to Rs 27,959.40 cr, and net profit is expected to increase by nearly 7% to Rs 4,085 cr, according to the average of estimates given by 11 brokerage firms.
IT stares at slowest quarterly revenue growth in a decade
The third-quarter results season will begin with TCS and Infosys announcing their results on January 11, followed by HCLTech and Wipro on January 12. The focus this quarter will be the commentary on the demand environment and 2024 budgets.
ET Explainer: Should Indian IT companies be concerned about Accenture’s Q2 guidance?
Discretionary spending is under pressure, decision-making is slow and small deals are fewer in number, as was the case in the recent quarters.
Eye on higher tech spend in 2024, IT firms see 5-6% rise in hiring
Hiring mandates put out by IT services cos – that had almost completely frozen recruitments in the last few quarters due to weak tech demand – are improving on a month-on-month basis, recruitment firms said.
HCLTech may not offer wage hikes to middle and senior-level staff in FY24
The classification of E0 – E2 employees range from freshers to technical leaders and E3 – E6 employee band are those with mid-level positions ranging starting from project managers up to vice presidents. E7 and above are the senior-level employees.
Top IT companies boost margins amidst market struggles
To be sure, Infosys, HCLTech and Wipro have slashed their revenue guidance for the upcoming quarter and full fiscal amid a freeze on tech spends and delay in decision making.
Stars of Indian IT companies dim amid challenging demand situation
A spate of geopolitical conflicts and macro-economic concerns have combined to dent the demand for tech services, putting Indian IT majors on the edge for FY24.
Bleak days ahead for IT firms as macro trends crimp spending; and other top, tech stories this week
Reluctance by clients to go for large spends on digital transformation over the past few quarters has taken a toll on big IT firms. Subdued macroeconomic trends have meant cutting down on discretionary spending and projects that do not immediately require investments.
LTTS Q2 results: Net profit up 5.2%, revenue up 4.6% YoY
In line with larger peers, Infosys and HCLTech, the company has also slashed its revenue growth guidance for the fiscal from 20% to 17.5-18.5%, due to “delayed decision making”.
HCLTech expects Q3, Q4 growth to lead industry numbers: CEO C Vijayakumar
Vijayakumar told ET that the lack of discretionary spending across clients through the past two quarters and limited resumption visibility on customer expenditures have been the key factors for slashing organic revenue growth guidance.
HCLTech trims full-year outlook on demand drop
For the fiscal second quarter ended September 30, the company posted an 11% sequential fall in revenue in constant currency terms. Net hiring also fell, but HCLTech said it expects the rest of the year to be “strong”.
Big IT’s strong deal flows in Q2 hint at possible rebound later in the year
After a subdued second quarter show by TCS on Wednesday, Infosys and HCLTech reported numbers on Thursday. Infosys beat the average analyst estimates in terms of revenue and net profit. While HCLTech disappointed on the revenue front, its net profit was above expectations. Each of the two companies also declared their respective highest total contract value (TCV) of new deals
Wipro to roll out annual hikes effective December 1
The Bengaluru-based information technology firm had postponed the hikes, due in September, by a quarter due to macro headwinds and margin pressure.
Indian IT companies seen logging muted sequential growth in Q2 amid sustained macro overhang
The big earnings week for tech heavyweights is up ahead, with Tata Consultancy Services (TCS) scheduled to announce its results on October 11, and both Infosys and HCL Technologies on October 12. Wipro is slated to declare its Q2FY24 results next week, on October 18.
IT firms eye fixed price projects to improve margins
Fixed-price projects allow better cost control and a greater ability to introduce automation in projects and expand margins. By contrast, ‘time and material’ control are directly linked to the number of people hard-locked to billable projects.
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