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View Promises →HCL Technologies Ltd — Q3 FY24
HCLTech delivered a strong Q3 FY24 with 6% sequential revenue growth in constant currency, the highest since Q3 FY21.
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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.
HCLTech ने तीसरी तिमाही में मजबूत प्रदर्शन किया। कंपनी की कमाई पिछली तिमाही से 6% बढ़ी, जो पिछले कुछ सालों में सबसे अच्छी है। सेवाओं से कमाई 3.1% बढ़ी, भले ही कुछ ग्राहकों ने छुट्टियों के कारण काम रोका। सॉफ्टवेयर से कमाई पिछले साल से 5% ज्यादा रही। कंपनी का मुनाफा 19.8% तक पहुंच गया, जो पिछली तिमाही से 1.26% ज्यादा है। शुद्ध मुनाफा 4,350 करोड़ रुपये रहा, जो अब तक का सबसे ज्यादा है। इस साल अब तक 7.5 अरब डॉलर के नए ऑर्डर मिले हैं, जो पिछले साल से 10% ज्यादा हैं। कर्मचारियों के छोड़ने की दर घटकर 12.8% हो गई, जो काफी कम है। कंपनी को उम्मीद है कि इस साल कमाई 5-5.5% बढ़ेगी और मुनाफा 18-19% रहेगा। हालांकि, अमेरिका में मांग कमजोर है और आर्थिक अनिश्चितता बनी हुई है।
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Soft discretionary spending in IT services
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Read Transcript →Quarter Snapshot
Total Bookings (YTD)
$7.5B
+10% YoY
Year-to-date bookings grew 10% over the same period last year, driven by large deal wins.
Attrition (LTM)
12.8%
-1.4pp QoQ
Attrition declined 1.4 percentage points sequentially, reaching the lowest level since FY21.
Software ARR
$1.06B
+2.9% YoY
Annual recurring revenue for software grew 2.9% year-over-year in constant currency.
Large Deals (Services + Software)
18
N/A
The company signed 18 large deals in the quarter, including 6 in services and 12 in software.
What Changed vs Last Quarter
NEW
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.
UPDATED
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.
UPDATED
FY24 operating margin guidance of 18%-19%
Operating margins for FY24 are expected to be between 18% and 19%.
DROPPED
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%.
DROPPED
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.
NEW RISK
Soft discretionary spending in IT services
Management noted that discretionary spending remains soft with no change from previous quarters, which could impact growth.
NEW RISK
Uncertain demand environment in Americas
Despite strong growth, the Americas demand environment remains challenging, which could affect future performance.
NEW RISK
GenAI revenue still nascent
GenAI programs are currently small and in pilot stages; significant ramp-up is expected only over coming quarters.
RISK GONE
Sustained weakness in discretionary spending
Management noted discretionary spend has not recovered as expected, and the macro environment remains uncertain, which could pressure organic growth.
RISK GONE
Guidance cut raises execution questions
Analysts questioned the sharp 300 bps cut in the upper end of revenue guidance despite strong bookings, suggesting potential over-optimism earlier.
RISK GONE
Verizon deal ramp-up risks
The mega deal with Verizon is critical for H2 growth; any delays in transition or execution could impact revenue targets.
Fast read
Guidance and risk preview
Total revenue growth for FY24 is expected in the range of 5%-5.5% in constant currency, with services trending towards the higher end.
Management noted that discretionary spending remains soft with no change from previous quarters, which could impact growth.
View Risks →