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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
₹28,446 Cr
verified against source
Revenue YoY
4.3%
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 Q3 FY24 with 6% sequential revenue growth in constant currency, the highest since Q3 FY21. Services revenue grew 3.1% QoQ despite furloughs, while software revenue rose 5% YoY. Operating margin improved to 19.8%, up 126 bps QoQ, driven by software outperformance. Net income reached a record INR 4,350 crore. Bookings YTD stood at $7.5 billion, up 10% YoY, with 18 large deals. Attrition fell to 12.8%, the lowest in several quarters. Management guided FY24 revenue growth of 5%-5.5% and margins of 18%-19%, with services expected at the higher end. Q4 growth is expected from large deal ramp-up, furlough reversal, and ER&D momentum. However, discretionary spending remains soft, and GenAI contributions are still nascent. A key risk is the uncertain demand environment in Americas and potential headwinds from macro uncertainty.
Colored figures show movement against the previous available record.
Guidance to track
- Total revenue growth for FY24 is expected in the range of 5%-5.5% in constant currency, with services trending towards the higher end.
- Operating margins for FY24 are expected to be between 18% and 19%.
- Q4 services growth expected from large deal ramp-up, furlough reversal, ER&D momentum, and rest of portfolio.
Risks flagged
- Management noted that discretionary spending remains soft with no change from previous quarters, which could impact growth.
- Despite strong growth, the Americas demand environment remains challenging, which could affect future performance.
- GenAI programs are currently small and in pilot stages; significant ramp-up is expected only over coming quarters.
- Wage hikes impacted services margins by 65 bps in Q3, and Q4 will see a smaller impact of 20-25 bps.
Key quotes
- We have delivered a sixer of a quarter, with 6% constant currency growth quarter-on-quarter.
- Our operating margins were strong at 19.8%, 126 basis points improvement sequentially, and 16 basis points improvement year-on-year.
- While we still don't see an uptick in the overall discretionary spend, there is still a portion of tech spend that should remain resilient.
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