HCL Tech share price

Q: What are analysts saying about HCL’s Q3 expectations?

Analysts are optimistic about stronger growth in Q3, driven by new deal ramp-ups and reduced onsite expenses.

HCL Tech’s Q2 Surge: 25.21% Stock Rise in 2024 and a Strong FY25 Outlook

As HCL Technologies (HCL Tech) gears up for its quarterly results, the company’s stock is already riding a wave, up by a stunning 25.21% in 2024. That’s almost double the BSE Sensex’s rise of 13.41%. Investors are eagerly awaiting the September quarter results, with a particular focus on HCL’s FY25 guidance, potential new deals, and profit margins.

Market analysts predict HCL Tech’s net profit could rise by up to 14% YoY in Q2, driven by steady, single-digit growth in sales and an improvement in operating margins. All eyes will be on HCL’s leadership to see if they’ll stick to their 3-5% growth guidance for the full year, despite some challenges like State Street’s impact on Q2.

One of the most interesting insights comes from HDFC Institutional Equities, which expects HCL to weather Q2’s obstacles while banking on stronger growth in Q3. With the stock currently trading at Rs 1,855.90, up 0.89% just ahead of the results, HCL’s performance is definitely one to watch.

Key Projections for HCL Tech’s September Quarter:

Axis Securities predicts a 14% YoY rise in profit, estimating Q2 earnings at Rs 4,055 crore, compared to Rs 3,534 crore last year.
Revenue is expected to grow by 9.2% YoY, hitting Rs 28,710 crore, up from Rs 26,290 crore.
The Ebit margin could land at 17.6%, a 51 basis point increase from Q1 but down by 829 basis points YoY.

Axis Securities also sees a potential 2.3% QoQ growth in revenue, helped by the ramp-up in previous deals, while IT Products & Platforms look especially strong. The operating margins could widen, thanks to lower onsite expenses and robust deal momentum.

What’s Next for HCL Tech in FY25?

The buzz is strong around HCL’s FY25 revenue outlook, with analysts predicting the company will hold on to its 3-5% growth guidance in constant currency (CC) terms, despite the impact of the State Street divestment. With Emkay Global forecasting a 1.4% QoQ dollar revenue growth, they expect cross-currency tailwinds to play a significant role in HCL’s future earnings.

Investors will also keep a close eye on several crucial factors, such as:

Deal Wins & Pipeline: New deals and closures could play a major role in Q3 and beyond.
Vertical Performance: BFSI, Manufacturing, Technology, Communications, Retail, and Healthcare will be key sectors driving HCL’s performance.
ER&D & Software Business Growth: Updates on acquisitions like CTG assets from HPE and their potential financial impact.

As we head into FY25, there’s a growing sense of optimism around HCL Tech’s ability to outshine its peers. With a balanced approach to growth across verticals and a keen focus on operating margins, the future looks promising for this tech giant.

Conclusion:

HCL Tech has performed exceptionally well in 2024, with strong profit and revenue growth expectations ahead of its September quarter results. Investors are optimistic about its FY25 guidance, with deal wins and margin improvements playing key roles in driving future success. HCL Tech share price, As the tech giant continues to navigate global challenges, its ability to maintain growth in major verticals will be essential for sustained momentum.

FAQs:

1.Why is HCL Tech’s stock up by 25.21% in 2024?

A. The stock has risen sharply due to positive market sentiment, strong financial performance, and anticipated growth in new deals and verticals.

2.What is HCL’s FY25 revenue guidance?

A. HCL Tech is expected to maintain a 3-5% growth outlook for FY25 despite challenges like the State Street divestment.

3.What sectors are driving HCL’s growth?

A. Key sectors include BFSI, Manufacturing, Technology, Communications, Retail, and Healthcare.

4.How much profit is HCL expected to post in Q2 2024?

A. Profit is projected to rise 14% YoY, potentially reaching Rs 4,055 crore.

5.What is the forecast for HCL’s revenue growth in Q2?

A. Revenue is expected to grow by 9.2% YoY, reaching Rs 28,710 crore.

6.How are HCL’s operating margins looking for Q2 2024?

A. The Ebit margin is expected to be 17.6%, reflecting a slight improvement QoQ but a YoY decline.

7.What are analysts saying about HCL’s Q3 expectations?

A. Analysts are optimistic about stronger growth in Q3, driven by new deal ramp-ups and reduced onsite expenses.

8.Will HCL continue to win new deals in FY25?

A. Yes, analysts expect HCL to secure new deals, with deal closures becoming more robust in Q3.

9.What is the impact of the State Street divestment?

A. The State Street divestment had a minor impact on HCL’s Q2 results, but the company is expected to recover by Q3.

10.How will cross-currency tailwinds affect HCL’s earnings?

A. Cross-currency tailwinds could contribute 70 basis points to HCL’s QoQ dollar revenue growth, providing a positive boost in the coming quarters.