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A source-linked quarter view: reported numbers, management language, guidance, and the risks that should carry forward.
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Revenue
₹28,862 Cr
verified against source
Revenue YoY
6.2%
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 delivered a strong Q2 FY25 with constant currency revenue growth of 6.2% YoY and 1.6% QoQ, driven by broad-based demand across verticals and geographies. Operating margin expanded 149 bps QoQ to 18.6%, aided by operating leverage and seasonally lower marketing spend. Services revenue grew 5.9% YoY, while HCLSoftware posted a standout 9.4% YoY growth with ARR reaching $1.05B. Deal wins remained healthy with TCV of $2.2B, and AI Force adoption is gaining traction across 25 clients. Management raised the lower end of FY25 revenue guidance to 3.5%-5% YoY (from 3%-3.5%), while maintaining EBIT margin guidance of 18%-19%. However, caution persists due to geopolitical risks, furloughs, and pressure in automotive and aerospace verticals. Wage hikes in Q3/Q4 will pressure margins by 65-80 bps and 50-60 bps respectively. The key risk is a sudden pullback in discretionary spending amid macro uncertainty.
Colored figures show movement against the previous available record.
Guidance to track
- 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 for FY25 is also expected between 3.5% and 5% year-on-year in constant currency.
- EBIT margin for FY25 is maintained at 18%-19%, despite wage hike impacts in H2.
- Wage hikes will impact margins by 65-80 basis points in Q3 and a further 50-60 basis points in Q4.
Risks flagged
- Management cited geopolitical factors and global economic conditions as potential headwinds, and noted that discretionary spending can turn quickly.
- Automotive, especially in Europe, is under stress with program cancellations; aerospace may also see impact from client-specific issues.
- Management assumes similar furloughs as last year, which could limit sequential growth in Q3 and Q4.
- Net headcount declined even as revenue grew, raising questions about scalability and future hiring needs.
Key quotes
- Our operating margin stood at 18.6%, an increase of 149 basis points compared to the last quarter. This is as a result of our strong operational execution.
- We are also a little bit more cognizant of the broader macroeconomic environment and the geopolitical context... if you see the FY 2022, the calendar year 2022 in November, December, when the optimism was there, but it suddenly turned, so to that extent, we are cautious.
- Our GenAI platform, AI Force, is now getting widely adopted for service transformation. A Fortune 200 global technology solutions company has chosen our AI Force-led solution as a part of the overall ITO program.
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