FY24 revenue growth guidance maintained at 6-8% CC
Despite Q1 softness, management reaffirms constant currency revenue growth guidance of 6-8% for FY24, relying on strong pipeline conversion.
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FY24 EBIT margin guidance maintained at 18-19%
Management reaffirms EBIT margin guidance of 18-19% for FY24, supported by cost actions including skipping compensation reviews.
Strong booking expected in Q2 FY24
Management expects a significant spike in bookings in Q2, driven by advanced-stage large deals in the pipeline.
FY25 revenue growth guidance maintained at 3-5% constant currency
Management reiterated full-year revenue growth guidance of 3-5% in constant currency, despite an 80bps impact from the State Street JV divestiture.
FY25 EBIT margin guidance maintained at 18-19%
EBIT margin guidance for FY25 remains at 18-19%, with Q1 at 17.1% and expected improvement in subsequent quarters.
Q2 FY25 sequential growth expected across all verticals except Financial Services
Management expects Q2 to show sequential growth in all verticals and geographies except Financial Services, which will be impacted by the State Street JV exit.
Plan to train 50,000 employees on GenAI/AI skills in FY25
HCLTech targets training 50,000 employees on GenAI and AI skills this fiscal year; 33% of this target was achieved in Q1 alone.
FY26 revenue guidance raised to 3%-5% CC
Revenue growth guidance improved from 2%-4% to 3%-5% in constant currency, based on better Q1 performance and outlook.
FY26 EBIT margin guidance lowered to 17%-18%
EBIT margin guidance reduced from 18%-19% to 17%-18%, factoring in Q1 headwinds, restructuring costs, and AI investments.
Restructuring program in FY26
One-time restructuring costs (people and non-people) of 30-40 bps impact in subsequent quarters to improve structural agility.
AI investments to normalize by FY27
Management expects SG&A percentage to normalize in FY27 as growth catches up with AI investments.
FY24 revenue growth guidance revised to 5%-6%
Company-level constant currency revenue growth for FY24 is now expected at 5%-6%, down from the earlier 6%-7% range, due to weak H1 discretionary spend.
Services organic growth guidance of 4.5%-5.5%
Organic services revenue growth for FY24 is guided at 4.5%-5.5% in constant currency, implying strong H2 CQGR of 2.6%-3.8%.
EBIT margin guidance maintained at 18%-19%
Full-year EBIT margin guidance remains unchanged at 18%-19%, supported by operational efficiencies and cost optimization.
Wage hike impact of 60-65 bps in Q3
Annual wage hikes deferred to October will impact Q3 margins by ~60-65 bps, with an additional 25-30 bps in Q4.
FY25 revenue growth guidance raised to 3.5%-5% YoY in CC
Overall revenue growth for FY25 is now expected between 3.5% and 5% year-on-year in constant currency, revised up from 3%-3.5%.
Services revenue growth guidance of 3.5%-5% YoY in CC
Services revenue growth for FY25 is also expected between 3.5% and 5% year-on-year in constant currency.
EBIT margin guidance unchanged at 18%-19%
EBIT margin for FY25 is maintained at 18%-19%, despite wage hike impacts in H2.
Wage hike impact of 65-80 bps in Q3 and additional 50-60 bps in Q4
Wage hikes will impact margins by 65-80 basis points in Q3 and a further 50-60 basis points in Q4.
FY26 services revenue guidance raised to 4-5% CC
Full-year services revenue growth guidance increased from 3-5% to 4-5% in constant currency, reflecting strong Q2 momentum.
Company-level revenue guidance maintained at 3-5% CC
Overall company guidance unchanged due to softness in software segment.
Full-year EBIT margin guidance maintained at 17-18%
Management reiterated EBIT margin guidance of 17-18% for FY26.
Restructuring costs may be slightly higher than 40 bps for full year
Restructuring impact of 55 bps in Q2; full-year impact may exceed the earlier estimate of 40 bps, continuing into Q3 and possibly Q4.
FY24 revenue growth guidance of 5%-5.5%
Total revenue growth for FY24 is expected in the range of 5%-5.5% in constant currency, with services trending towards the higher end.
FY24 operating margin guidance of 18%-19%
Operating margins for FY24 are expected to be between 18% and 19%.
Q4 services growth driven by four factors
Q4 services growth expected from large deal ramp-up, furlough reversal, ER&D momentum, and rest of portfolio.
FY25 revenue growth guidance of 4.5%-5% YoY in CC
Includes approximately 50bps contribution from HPE CTG acquisition. Services revenue growth also expected between 4.5%-5% YoY in CC.
EBIT margin guidance unchanged at 18%-19%
Management maintained EBIT margin guidance for FY25 at 18%-19%.
Q4 services organic growth expected -1.3% to +0.6% QoQ
Implies a sequential decline or modest growth due to large project completion and planned mega deal rundown.
Software business expected low single-digit growth for FY25
Management expects low single-digit growth for the software business on a full-year basis, with some delayed renewals potentially not recovering in Q4.
FY26 Services Revenue Growth Guidance Raised to 4.7%-5.25% CC
Full-year services constant currency growth guidance raised to 4.7%-5.25% from previous range, reflecting strong Q3 performance and bookings.
FY26 Overall Revenue Growth Guidance Raised to 4%-4.5% CC
Company-level constant currency growth guidance raised to 4%-4.5% for FY26.
FY26 EBIT Margin Guidance Maintained at 17%-18%
Full-year EBIT margin guidance remains at 17%-18%, inclusive of restructuring costs but excluding one-time labor code impact.
Ongoing Labor Code Cost Impact Minimal at 10-20 bps
Management expects minimal ongoing costs from new labor code, estimated at 10-20 basis points impact on margins.
FY25 Revenue Growth 3-5% CC
HCLTech guides for constant currency revenue growth of 3-5% for FY25, with Q1 expected to decline ~2% sequentially due to offshoring impact in a large FS deal and annual productivity passbacks.
FY25 Operating Margin 18-19%
Operating margin guidance for FY25 is maintained at 18-19%, consistent with FY24 actuals, with no specific timeline to reach the aspirational 20% level.
Q1 FY25 Revenue Decline ~2% QoQ
Management expects Q1 FY25 revenue to decline approximately 2% sequentially, driven by offshoring in a large deal and annual productivity passbacks, excluding State Street impact.
FY26 Revenue Growth 3%-5% CC
Full-year constant currency revenue growth guidance for the company, with lower end assuming macro deterioration and upper end assuming stable environment and large deal closures.
FY26 EBIT Margin 18%-19%
Full-year EBIT margin guidance for both services and software, consistent with FY25 margin of 18.3%.
Q1 Seasonality Expected to Be Normal
Q1 FY26 will have typical seasonal weakness but better than Q1 FY25, with ramp-up of mega deal starting in a few weeks.
Inorganic Contribution ~1% in FY26
The CTG acquisition (closed Dec 2024) will contribute approximately 1% to FY26 revenue growth.
FY27 revenue growth 1-4% CC
Consolidated revenue growth guidance for FY27 in constant currency; services growth 1.5-4.5%.
FY27 EBIT margin 17.5-18.5%
Operating margin guidance for FY27, excluding impact of acquisitions.
Two clients to cause ~50bps growth headwind in FY27
Specific client reductions in manufacturing and retail will impact growth by about 50 basis points.
AI native services to grow 25-30%
Management expects advanced AI services (AI factory, custom silicon) to grow at 25-30% annually.