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Earnings

HCL Tech expects revenue growth at around 11.5% for FY19

Updated : January 30, 2019 11:10 AM IST

Tech giant HCL Technologies reported strong revenue growth in the third quarter ended December 2018. Constant currency revenue growth came in at 5.6 percent quarter-on-quarter (QoQ) and 13 percent year-on-year (YoY). Margins too were in-line and profit after tax beat estimate on lower tax.

The company has maintained its FY19 guidance of constant currency growth of 9.5-11.5 percent and EBITA growth of 19.5-20.5 percent.

In an interview with CNBC-TV18, C Vijayakumar, CEO and Prateek Aggarwal, CFO of the company, shared further details about the quarterly performance and the outlook going forward.

Vijaykumar said the company expects FY19 revenue towards the higher range of their guidance. “We continue to provide and increase revenue growth commentary and given that we have had a good quarter now, we expect a good next quarter. The exit is going to be strong, which augers well for the next year,” he said.

Vijaykumar stated that he was optimistic of healthy order booking in Q4.

“As far as EBIT is concerned, over the last three quarters, we have been in this range of 19.6-19.9 percent, it is within the guidance range. However, the forex fluctuation on quarter-to-quarter has been volatile and the gain to the P&L has been only 15 basis points,” explained Aggarwal. One basis point is a hundredth of a percentage point.

With regards to pricing, Aggarwal said pricing is very customer and service specific.

On BFSI segment, Vijaykumar said the pressure seen in the segment is limited to client specific situations.

“I do believe there is enough traction in BFSI across the board. In fact, one of the large deals we closed in the last quarter is on the financial services segment and that is bringing in some cutting edge automation capabilities, it is consolidating the whole reconciliation processes. So the pipeline is very good and I feel confident next year it should deliver reasonably good growth,” said Vijaykumar.
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