HCLTech Management Guidance Tracker

Despite Q1 softness, management reaffirms constant currency revenue growth guidance of 6-8% for FY24, relying on strong pipeline conversion.

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.

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%.

Total revenue growth for FY24 is expected in the range of 5%-5.5% in constant currency, with services trending towards the higher end.

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.

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.

Management reiterated full-year revenue growth guidance of 3-5% in constant currency, despite an 80bps impact from the State Street JV divestiture.

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.

Includes approximately 50bps contribution from HPE CTG acquisition. Services revenue growth also expected between 4.5%-5% YoY in CC.

Implies a sequential decline or modest growth due to large project completion and planned mega deal rundown.

Management expects low single-digit growth for the software business on a full-year basis, with some delayed renewals potentially not recovering in Q4.

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.

Q1 FY26 will have typical seasonal weakness but better than Q1 FY25, with ramp-up of mega deal starting in a few weeks.

Revenue growth guidance improved from 2%-4% to 3%-5% in constant currency, based on better Q1 performance and outlook.

Full-year services revenue growth guidance increased from 3-5% to 4-5% in constant currency, reflecting strong Q2 momentum.

Overall company guidance unchanged due to softness in software segment.

Full-year services constant currency growth guidance raised to 4.7%-5.25% from previous range, reflecting strong Q3 performance and bookings.

Company-level constant currency growth guidance raised to 4%-4.5% for FY26.

Consolidated revenue growth guidance for FY27 in constant currency; services growth 1.5-4.5%.

Management reaffirms EBIT margin guidance of 18-19% for FY24, supported by cost actions including skipping compensation reviews.

Full-year EBIT margin guidance remains unchanged at 18%-19%, supported by operational efficiencies and cost optimization.

Annual wage hikes deferred to October will impact Q3 margins by ~60-65 bps, with an additional 25-30 bps in Q4.

Operating margins for FY24 are expected to be between 18% and 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.

EBIT margin guidance for FY25 remains at 18-19%, with Q1 at 17.1% and expected improvement in subsequent quarters.

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.

Management maintained EBIT margin guidance for FY25 at 18%-19%.

Full-year EBIT margin guidance for both services and software, consistent with FY25 margin of 18.3%.

EBIT margin guidance reduced from 18%-19% to 17%-18%, factoring in Q1 headwinds, restructuring costs, and AI investments.

Management reiterated EBIT margin guidance of 17-18% for FY26.

Full-year EBIT margin guidance remains at 17%-18%, inclusive of restructuring costs but excluding one-time labor code impact.

Management expects minimal ongoing costs from new labor code, estimated at 10-20 basis points impact on margins.

Operating margin guidance for FY27, excluding impact of acquisitions.

Management expects a significant spike in bookings in Q2, driven by advanced-stage large deals in the pipeline.

Q4 services growth expected from large deal ramp-up, furlough reversal, ER&D momentum, and rest of portfolio.

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.

The CTG acquisition (closed Dec 2024) will contribute approximately 1% to FY26 revenue growth.

Specific client reductions in manufacturing and retail will impact growth by about 50 basis points.

HCLTech targets training 50,000 employees on GenAI and AI skills this fiscal year; 33% of this target was achieved in Q1 alone.

Management expects SG&A percentage to normalize in FY27 as growth catches up with AI investments.

Management expects advanced AI services (AI factory, custom silicon) to grow at 25-30% annually.

One-time restructuring costs (people and non-people) of 30-40 bps impact in subsequent quarters to improve structural agility.

Restructuring impact of 55 bps in Q2; full-year impact may exceed the earlier estimate of 40 bps, continuing into Q3 and possibly Q4.