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Revenue
₹28,057 Cr
verified against source
Revenue YoY
5.6%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
HCLTech reported Q1 FY25 revenue of $3.36B, down 1.6% sequentially but up 5.6% YoY in constant currency, slightly above expectations. Services revenue declined 1.9% QoQ, while Software grew 0.4% QoQ with ARR at $1.01B. EBIT margin was 17.1%, down 50bps QoQ but up 13bps YoY, within the guided 18-19% range for the full year. Growth was led by Telecom & Media (+69.2% YoY) and Retail (+9.7% YoY), while Manufacturing declined due to automotive weakness and ASAP acquisition softness. Bookings TCV was $1.96B. Management maintained FY25 revenue guidance of 3-5% and EBIT margin of 18-19%, expecting Q2 growth across all verticals except Financial Services due to State Street JV exit. GenAI momentum continues with AI Force and AI Foundry platforms, but discretionary spending remains cautious. Risk: Automotive sector stress in Europe could further impact Manufacturing revenue.
Colored figures show movement against the previous available record.
Guidance to track
- Management reiterated full-year revenue growth guidance of 3-5% in constant currency, despite an 80bps impact from the State Street JV divestiture.
- EBIT margin guidance for FY25 remains at 18-19%, with Q1 at 17.1% and expected improvement in subsequent quarters.
- 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.
- HCLTech targets training 50,000 employees on GenAI and AI skills this fiscal year; 33% of this target was achieved in Q1 alone.
Risks flagged
- Softness in the automotive segment, especially in Europe, led to a sharp decline in ASAP acquisition revenue and impacted Manufacturing vertical performance.
- Management noted that discretionary spend has not picked up meaningfully, and recovery depends on macro factors like interest rates and inflation.
- CVK highlighted that competitive intensity, more than client expectations, is leading to irrational behavior in pricing for GenAI-related contracts.
- The State Street BPO JV divestiture will cause an 80bps revenue impact at the company level and 90bps at the services level in Q2.
Key quotes
- More than the expectations from the clients on GenAI, I think it's the competitive intensity which is kind of driving some irrational behavior.
- Our guidance continues to be 18%-19%.
- I think it's just the macro factors, I would assume. I mean, while some companies have delivered very good profitability and things like that, but there is still a conservatism that is there, which I think will loosen up a little bit with some signals and some real changes in the macros.
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