By Sai Ishwarbharath B and Haripriya Suresh
BENGALURU (Reuters) -India’s HCLTech on Monday posted bigger-than-expected second-quarter revenue on a boost from its engineering and R&D services segment, and retained its annual forecast.
The country’s third-largest IT services firm reported a 10.7% year-on-year rise in consolidated revenue to 319.42 billion rupees ($3.60 billion) for the July-September quarter. Analysts, on average, expected revenue of 313.55 billion rupees, as per data compiled by LSEG.
The company also maintained its 3%-5% revenue growth forecast for the current fiscal year, in line with analysts’ expectations.
“Good set of numbers in terms of revenue and deal figures. Though the forecast has been retained, there are very few downside risks for HCLTech at the moment,” said Piyush Pandey, an analyst at Centrum Broking.
The engineering segment’s boost comes on the back of execution of a Volvo Cars deal the company bagged in June. It also secured a deal from European energy firm Equinor in July.
The segment’s revenue rose 13.4%, the only one to clock double-digit growth.
Profit for the quarter was flat at 42.35 billion rupees, a tad below analysts’ estimate of 42.39 billion rupees.
Indian IT exporters have seen muted demand from the U.S., their biggest market, as a recent hike in H-1B visa fees and steep U.S. tariffs on Indian goods add to broader macroeconomic uncertainty.
By geography, all of HCLTech’s markets grew, led by 7.6% growth in Europe and 17.9% in rest of the world.
HCLTech’s new deal bookings stood at $2.57 billion in the second quarter, up from $1.81 billion in the previous quarter and $2.2 billion in the year-ago period.
However, operating margin for the quarter fell 130 bps from a year ago to 16.5% due to restructuring costs, although the impact was partly offset by the depreciation of the rupee.
In July, the company had said it will seek to close some offices and do a “talent rampdown” in some locations outside India.
Shares of HCLTech closed 0.1% lower ahead of its results.
Peers Infosys and Wipro, and LTIMindtree will report their results later in the week.
Last week, Tata Consultancy Services, India’s top IT services firm, reported better-than-expected quarterly revenue and announced its entry into data centre operations.
($1 = 88.6820 Indian rupees)
(Reporting by Sai Ishwarbharath B; Editing by Sonia Cheema and Sahal Muhammed)
