HCL Tech Q4 Results Preview: Shiv Nadar-backed HCL Technologies witnessed buying sentiment on BSE and NSE on Tuesday ahead of its Q4 results. HCL stock zoomed by 1.2% to hit an intraday high of Rs 1497.40 apiece on April 22. In its Q4FY25, HCL Tech's EBIT margins are expected to expand on a year-on-year basis but would record a sequential decline. Additionally, the tech player is likely to report a decline in revenue due to seasonal weakness. Its peers TCS and Infosys have missed estimates in Q4, while Wipro earnings were upbeat. Expectation of dividends from HCL is also on the cards!
HCL Tech Share Price:
After closing hours of April 21, HCL Tech's share price closed at Rs 1480.10 apiece, up by 2.92% on BSE, with a market cap of Rs 401,649.57 crore. The stock's 52-week high and low is at Rs 2,011 and Rs 1,235 apiece respectively.
HCL Tech has a strong return on equity of 32.91%, while price-to-equity ratio is at 33.52%.
HCL Tech Q4 Results Preview:
HCL Tech's board of directors will meet on April 22, to consider and approve financial results for the quarter and financial year ended March 31, 2025. The result will be announced after market hours of Tuesday.
On April 22, following the results announcement, senior management of HCL Technologies will conduct audio conference call at 7:30 p.m. (IST) for 60 minutes to discuss the results followed by the detailed question-answer session.
Brokerage Kotak Institutional Equities has forecasted a constant currency revenue decline of 0.7% due to seasonal weakness in the products business. While the brokerage forecasted 0.9% growth in the services business and (-)0.1% on an organic basis. Revenues include a 90 bps contribution from the CTG acquisition.
Additionally, Kotak expects an EBIT margin of 18.2%, an increase of 60 bps yoy and a decline of 140 bps qoq. The decline in qoq is due to lower license revenues from the products business. 4QFY24 had transition costs related to the Verizon deal. While, the TCV of net new deals is forecasted at US$2.2 bn, similar to earlier quarters.
Kotak is predicting revenue guidance of 3-5% from HCL, which will include a 100 bps contribution from CTG acquisition. The guidance implies revenue CQGR of 0.5-1.3% through FY2026. EBIT margin guidance band of 18-19% will stay unchanged.
Furthermore, Sharekhan said, "HCL Tech is expected to report a sequential revenue growth of -0.7% in CC terms due to weak seasonality of its product business. EBIT margin is expected to decline by ~110 bps q-o-q impacted by residual wage hike and product business seasonality."
Also, brokerage Nuvama added, "Revenue shall report revenue decline of -0.7% QoQ in CC and -1.3% QoQ in USD - driven by Services (+0.5% QoQ) and P&P (-15% QoQ). Services business will be boosted by two months of inorganic contribution (HPE, ~1%). EBIT margin to fall 170bp QoQ due to P&P seasonality. We expect HCLT to guide to FY26 revenue growth (3-5% CC YoY growth in Services) and margin (18-19%)."
Key factors to focus on HCL Tech Q4 results, as per Kotak are --- : (1) decision making slowdown and impact of macro deterioration on the overall business, (2) new deal TCV that has been fairly modest over the past few quarters, (3) impact to revenues, if any, from Verizon deal anniversary, (4) revenue growth in June quarter, a seasonally weak quarter for the company, (5) strength of discretionary spending environment, a necessity noting lack of mega-deals, and (6) environment required to hit aspirational margin band of 19-20%.
During Q3FY25, HCL Tech reported 8.4% QoQ and 5.5% YoY growth in consolidated net profit to Rs 4,591 crore. In that quarter, the tech giant posted consolidated revenue of Rs 29,890 crore, registering growth of 3.6% QoQ and 5.1% YoY. On the top-line front, the constant currency revenue growth stood at 3.8% QoQ and 4.1% YoY. In dollar terms, the revenue was at $3,533 million, up by 2.5% QoQ and 3.5% YoY.
HCL Tech Dividend 2025:
HCL Tech board has also announced to consider the proposal of dividend on April 22. The record, ex-date and payment date for the upcoming dividend will be announced eventually.
So far, HCL Tech has delivered up to 90 dividends since May 2003, as per Trendlyne data. In the past 12 months, the company paid about Rs 60 dividend per share. Its current dividend yield is about 4.05%.
BUY/SELL HCL TECH?
Kotak has recommended REDUCE rating with target price of Rs 1,650 on HCL. On the other hand, Sharekhan suggested BUY rating on HCL with target price of Rs 2,180 ahead of earnings. Brokerage Nuvama suggested HOLD stance on HCL for target price of Rs 1,700.
About HCL Technologies:
HCLTech is a global technology company, home to more than 220,000 people across 60 countries, delivering industry-leading capabilities centered around digital, engineering, cloud and AI, powered by a broad portfolio of technology services and products.
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