HCL Technologies Q4FY18 results: Here's what brokerages expect

HCL Technologies (HCL Tech) is likely to announce its fourth quarter results on Wednesday. Among the key things to look out for, according to analysts, are the operating margin movement and traction in digital and update on IP partnerships in the recently concluded quarter. That apart, the guidance / commentary for FY19 will be key.

HCL Tech had posted a marginal 0.30 per cent quarter-on-quarter (QoQ) increase in its consolidated net profit at Rs 21.94 billion for the December 2017 quarter. Revenue increased three per cent QoQ and 8.4 per cent YoY to Rs 128.08 billion during the quarter under review.

On a year-to-date basis, the stock has rallied around 19% and has underperformed the Nifty IT index that gained around 20% during this period, ACE Equity data shows. By comparison, the Nifty50 index has gained around 2% YTD.

Here’s what leading brokerages expect from the company in the March 2018 quarter.

EDELWEISS RESEARCH

We estimate the company to clock 3.4% and 2.2% dollar and constant currency (CC) revenue growth QoQ, respectively. We expect organic revenue to jump 1.6% QoQ, while inorganic revenue from IP-deals will fuel revenue growth by additional 60bps.

The revenue growth guidance is pegged at 8-10% for FY19, after including inorganic portion of 150bps. Margin guidance is expected to be maintained in the 19.5-20.5% range. We believe, the IT major is well positioned to post modest revenue and earnings growth due to robust order book and improving outlook in IMS business.

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