Even as India Inc’s earnings season has begun with India’s largest IT services company TCS Already declared its financial results, another IT major HCL Technology is set to announce the April-June 2022 results on Tuesday (July 12). In addition to revenue and profit/loss figures, the company will also provide commentary on its product and platform business and provide margin and revenue outlook. Here are the important criteria that investors need to look at for the results:
Profit After Tax / Net Profit
Profit is the key metric in a company’s financial statement. According to a report by ICICI Securities, the profit after tax (PAT) of HCL Tech is expected to decline by 7.9 per cent.
increase in revenue
According to a report by brokerage firm BNP Paribas, HCL Tech is likely to post 1.4 per cent QoQ dollar revenue growth (2.9 per cent QQ in constant currency) as strong revenue growth is offset by productivity commitments.
Another brokerage firm ICICI Securities expects HCL Tech to underperform in the seasonally weak quarter. It said that due to 60 bps (basis points) cross-currency headwind, HCL Tech is expected to report quarter-on-quarter growth in dollar terms. The rupee is likely to register a revenue growth of 3.7 per cent on a quarterly basis.
FY23 Revenue and Margin Guidance
This is an important thing to watch because the guidance gives an idea of the company’s growth prospects going forward. HCL Tech will also provide commentary on the product and platform business. According to brokerage firm BNP Paribas, HCL Tech may maintain its guidance of Mudra revenue growth of 12-14 per cent in FY13.
big deal win
The company’s total contract value (TCV) for New Deal wins was $2,260 million for the March 2022 quarter, registering a six percent qoq growth. TCV for the full year of fiscal 2012 was $8,308 million, an increase of 14 percent year-on-year.
Ten net new deals won in Q4, with TCV Services at $2,216 million enabled by six net new large services deal wins; Enabled by four net new large product deal wins and a significant number of small deals on product TCV $54 million.
attractive price
The company’s attrition rate on an LTM (last twelve months) basis increased to 21.9 per cent during the March 2022 quarter from 19.8 per cent during the December 2021 quarter. Its total number stood at 2,08,877 with a net increase of 39,900 during the year, an increase of 23.6 per cent year-on-year. Net additions stood at 11,100 during the March 2022 quarter, up 5.6 per cent sequentially.
For the IT sector as a whole, BNP Paribas said that in an environment of weak demand, it looks at large-scale companies to outperform. “Accordingly, our top picks are Infosys and TCS. We are building in a gradual moderation in IT demand and accordingly cutting our FY23-25E USD revenue growth by 0-4.5 per cent and margin projections by 0-150 bp. We also increase our WACC assumptions to reflect the higher cost of equity. This results in reduction of 0-16 per cent in our FY23-25E EPS and reduction in TP by 5.9-42.1 per cent.
Tata Consultancy Services (TCS), which announced its results on Friday, reported a consolidated net profit of Rs 9,478 crore for April-June 2022, a 5.2 per cent jump on a year-on-year basis. The company’s revenue grew 16.2 per cent to Rs 52,758 crore during the June 2022 quarter, as against Rs 45,411 crore in the year-ago period.
read all breaking news, today’s fresh newswatch top videos And live TV Here.