HCL Tech Q1 Review - Results Miss, Total Contract Value Comforting; Expect Acceleration In FY23: Dolat Capital
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Dolat Capital Report
HCL Technologies Ltd. reported weak results with revenue growth of 0.7% in constant currency terms (our estimate 2.3%) as revenues got impacted by revenue day loss due to Covid-19, deal in deal signings, weaker revenue recognition in some deals and impact of one client deal insourced.
Operating profit margin at 19.6% were ahead of estimate (our estimate: 19.1%) as it gained from lower utilisation, forex gains etc. Retained operating profit margin guidance at 19%-21%.
HCL Tech guided strong revenue growth for FY22 with base growth of double-digit, which along with strong total contract value data ($1.67 billion in Q1 and net new TCV at $7.3 billion in FY21) implies potential for improved growth performance hereon, setting by strong base for FY23 acceleration as well.
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