Whalesbook
Profit Pressure and Segment Concerns
The anticipated sequential profit decline stems largely from expected weakness in HCL Tech's products and platforms (P&P) business segment. Nuvama Institutional Equities forecasts an approximate 8% quarter-on-quarter drop in net profit, reaching over Rs 4,636 crore. This dip is compounded by seasonality in the software business, recent wage hikes, and restructuring expenses impacting EBIT margins.
Revenue Outlook and Year-Over-Year Growth
Despite near-term sequential pressure, year-over-year figures show stronger growth. Nuvama estimates revenue growing 13% year-on-year to over Rs 34,204 crore, while Kotak Institutional Equities estimates a slightly higher Rs 34,600 crore, representing over 14% YoY growth. Analysts also predict margin improvement, partly aided by rupee depreciation.
Guidance and Dividend Anticipation
HCL Tech is expected to provide fiscal year 2027 revenue growth guidance for its IT services segment in the 3-5% range, according to Kotak. The company’s board meets April 20-21 to review financial performance, ahead of the April 21 announcement where an interim dividend for FY26 will also be considered.
AI Strategy in Focus
Investors will also monitor the company's embedded AI strategy, which contributed $146 million in advanced AI revenue in Q3FY26. They will look for insights into the company's scalability and market expectations for the March-ended quarter.