HCL Technologies Q4 Review - Disappointing Margin Guidance: Prabhudas Lilladher
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Prabhudas Lilladher Report
HCL Technologies Ltd. reported revenue growth of 3% quarter-on-quarter U.S. dollar (our estimate: 3.8%, consensus: 3.7%) below our and consensus estimates, led by decline in products and platform business (down 5% QoQ U.S. dollar) and weak growth in engineering research and development (up 0.4% QoQ U.S. dollar).
This was offset by strong growth in IT services (up 5.2% QoQ U.S. dollar).
Ebit margin decreased sharply, (ex-milestone bonus at 20.4%, down 247 basis points QoQ and including milestone bonus at 16.6%, down 632 bps QoQ) due to impact of senior management wage hike, increased fresher hiring, impairment in P&P portfolio and milestone bonus.
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