HCL Technologies will be reporting its June-quarter earnings on Wednesday and analysts expect the company to report subdued results this time.
- Most of the IT companies, barring Infosys, have reported disappointing numbers. For HCL Technologies, the street is expecting a tepid revenue growth but there will be some severe margin compression.
- On the topline, analysts are working with a dollar revenue growth of about 1.3 percent. In constant currency terms, it should be a growth of 1.8 percent.
- Margins will be under pressure. According to a CNBC-TV18’s poll, it could be down by close to about 150 basis points (bps) and that is on account of the IBM acquisition.
- HCL Technologies also gives annual guidance for FY20. It was revenue growth of 14-16 percent and that is expected to be maintained this time around considering it is Q1. Even their margin guidance at 18.5 to 19.5 percent is likely to be maintained.
- The key thing to track will be the margin recovery after a weak start to the year.