HCL Tech Q1 expectations: Revenue growth to be impacted due to 2nd COVID wave

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HCL Technologies will report its Q1FY22 earnings on July 19 and the company's revenue growth is expected to be muted. Moreover, dollar revenue growth could come at 2% which will be lower than what peers have reported.

HCL Technologies will report its Q1FY22 earnings on July 19 and the company's revenue growth is expected to be muted. Moreover, dollar revenue growth could come at 2% which will be lower than what peers have reported.
Revenue growth will be impacted due to second COVID wave in India given the company's significant presence in NCR region.
EBIT margins are likely to go up 250 basis points to 19.15 percent, while margins could improve after a drop in 4Q FY21 due to wage hike and pyramid kicking in with fresher hiring.
The company is also expected to reiterate its FY22 guidance of at-least double-digit constant currency revenue growth and EBIT margins in a range of 19-21 percent.
The stock is trading at 12 year high valuation discount of 30 percent to Wipro. HCL Tech is trading at 20x FY22 PE while Wipro is at 26 times.