HCL Tech Q2 Results Preview: Revenue may rise up to 9.5% YoY; deal ramp-up to boost growth and margins – News Air Insight

India’s third-largest IT services company by market capitalisation, HCL Technologies (HCLT), will announce its Q2 earnings on Monday, October 13, where the tech major is set to report a net profit growth in a wide range of 0.8% to 6.1%. The bottom line is seen between Rs 4,136 crore and Rs 4,491 crore, showing muted year-on-year growth but healthy sequential improvement.

The revenue in the September-ended quarter is estimated between Rs 31,252 crore and Rs 31,603 crore, reflecting 8%-9.5% YoY growth and 3-4% QoQ growth.

The estimates of five brokerages have been taken into account, viz. Nomura, Nuvama Institutional Equities, Axis Securities, HDFC Securities and Choice Broking.

While Japanese brokerage has the most conservative profit after tax (PAT) estimates, HDFC Securities’ adjusted PAT is the highest in the pack. As for the revenue, Axis numbers are the lowest, while Choice is the most bullish.

Brokerages recommended 4 metrics to watch out for:

1. PAT

Nomura: Rs 4,136 crore, down 2.3% YoY, up 7.6% QoQ

Nuvama: Rs 4,275 crore, up 1% YoY, up 11.3% QoQ

Axis Securities: Rs 4,275 crore, up 0.9% YoY, up 11.2% QoQ

HDFC Securities: Rs 4,491 crore, up 6.1% YoY, down 16.1% QoQ

Choice Broking: Rs 4,268 crore, up 0.8% YoY, up 11.1% QoQ

The sequential uptick is expected to be driven by deal ramp-ups in BFSI, Hi-Tech, and ER&D verticals, although YoY growth remains constrained by ongoing restructuring costs.

2. Revenue

Nomura: Rs 31,511 crore, up 9.2% YoY, up 3.8% QoQ

Nuvama: Rs 31,396 crore, up 8.8% YoY, up 3.5% QoQ

Axis Securities: Rs 31,252 crore, up 8.3% YoY, up 3% QoQ

HDFC Securities: Rs 31,418 crore, up 8.9% YoY, up 3.5% QoQ

Choice Broking: Rs 31,603 crore, up 9.5% YoY, up 4.1% QoQ

Revenue growth is expected to be supported by a stable services business, improvement in products & platforms (P&P), and net new deal wins exceeding $2-2.5 billion, including at least one large deal closure.

3. EBIT / EBIT Margin

EBIT estimates fall between Rs 5,343 crore and Rs 5,432 crore, with margins expected to expand modestly QoQ despite YoY pressure:

Nomura: EBITDA margin 16.5%, down 210 bps YoY, up 20 bps QoQ

Nuvama: EBIT margin 17%, down 160 bps YoY, up 70 bps QoQ

Axis Securities: EBIT margin 17.2%, up 87 bps YoY, down 142 bps QoQ

HDFC Securities: EBIT margin 17.3%, down 129 bps YoY, up 101 bps QoQ

Choice Broking: EBIT margin 17.1%, down 143 bps YoY, up 86 bps QoQ

Analysts expect the modest sequential margin improvement to be aided by ongoing restructuring initiatives and better performance of the HCL Software unit, partially offset by higher sales investments.

4. Key monitorables

Street will watch out for FY26 guidance for revenue growth (3-5% YoY in CC terms) and EBIT margins (17-18%). Client discretionary spending trends, particularly in BFSI, ER&D, and digital segments, will remain a key monitorable.

Large deal wins and pipeline updates, along with the impact of macroeconomic headwinds on verticals like healthcare, manufacturing and retail, will be watched closely by the Street.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)