By Sai Ishwarbharath B and Haripriya Suresh
BENGALURU/MUMBAI (Reuters) -India’s HCLTech narrowed its full-year revenue growth forecast on Monday and reported a smaller-than-expected December quarter revenue on underperformance in its software business.
HCLTech now expects full-year revenue for fiscal 2025 to grow 4.5%-5%, from 3.5%-5% previously, on account of acquisitions.
The country’s third-largest software company by revenue completed the acquisition of certain IP assets from U.S.-based tech major HP Enterprise last month.
“We do see an improvement in the demand environment (in 2025) with discretionary spending witnessing some uptick,” said C Vijayakumar in a post-earnings press conference, adding that clients are looking at increasing their IT investments in 2025.
The software vertical, which accounts for 11% of overall revenue, performed “less than our own expectations”, he said.
HCLtech’s consolidated revenue rose 5.1% to 298.9 billion rupees ($3.45 billion) in the third quarter, falling short of analysts’ average expectation of 300.68 billion rupees, as per estimates compiled by LSEG.
Shaji Nair, analyst at brokerage Mirae Asset Sharekhan, pointed out that operating margin beat estimates.
“The Q3 performance and revised guidance reflects that the company is on track to deliver industry-leading growth among tier-1 IT companies for FY25,” he said.
India’s tech industry has been facing a growth slowdown over the last couple of years due to inflationary pressures and macroeconomic uncertainties.
However, analysts expect U.S. President-elect Trump’s pro-business policies to benefit Indian IT firms as the North American country accounts for over 40% of the sector’s overall revenue.
HCLTech’s quarterly net profit rose 5.5% to 45.91 billion rupees. Analysts had expected 45.82 billion rupees.
The company’s new deal wins stood at $2.1 billion in the quarter compared with $2.22 billion in the previous quarter and $1.93 billion in the quarter a year earlier.
Last Friday, shares of market leader Tata Consultancy Services jumped 5.6% after its CEO signalled a potential revival in demand, even as the company missed third-quarter estimates.
Wipro and Infosys will report numbers later this week.
HCL Tech’s shares closed 0.3% lower ahead of the results.
($1 = 86.6770 Indian rupees)
(Reporting by Sai Ishwarbharath B and Haripriya Suresh; Editing by Eileen Soreng and Janane Venkatraman)
