HCL Tech Raises Revenue, Margin Guidance For Q2 FY21, Shares At All-Time High
Employees work at computers. (Photographer Dhiraj Singh/Bloomberg)

HCL Tech Raises Revenue, Margin Guidance For Q2 FY21, Shares At All-Time High

Shares of HCL Technologies Ltd. touched an all-time high after the software services provider raised its revenue and operating margin guidance for the quarter ending September.

The revenue growth for the ongoing quarter is expected to exceed 3.5% sequentially in constant currency, aided by a healthy pipeline across service lines, verticals and geographies. The EBIT margin is expected to be between 20.5% and 21.0%, according to an exchange filing. The company, while announcing the results for the April-June period, had guided for a 1.5-2.5% increase in revenue for the next three quarters in constant currency terms. Operating margin, it had said, were likely to range between 19.5% and 20.5% for the fiscal ending March 2021.

The company had shunned the practice of providing annual guidance in the quarter ended March amid the uncertainties stemming from the coronavirus outbreak, but resumed it in the three months ended June.

“We are providing this mid-quarter update as we expect the revenue and the operating margin for the current quarter (September’20) to be meaningfully better than the top end of the guidance we had provided in July 2020,” the filing stated.

The company, according to the filing, has seen strong execution during the quarter to date and expects the momentum to continue. “Good booking momentum continues this quarter, led by life sciences and healthcare, telecom and media, and financial services verticals.”

HCL Technologies had witnessed a 7.3% quarter-on-quarter decline in net profit at Rs 2,925 crore in the three months ended June. Its revenue fell 4% to Rs 17,841 crore, while EBIT margin contracted 40 basis points to 20.5% in during the quarter.

Shares of HCL Technologies gained as much as 8.1% at Rs 778 apiece in early trade on Monday, compared with a 0.62% rise in Nifty 50 Index.

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