By Sai Ishwarbharath B and Haripriya Suresh
BENGALURU (Reuters) -India’s No.3 software-services exporter HCLTech maintained its annual revenue growth forecast of 3%-5% despite macroeconomic uncertainty, after beating second-quarter revenue estimates on strength in its engineering services segment.
Monday’s news came after industry leader Tata Consultancy Services last week also forecast better growth in the back half of the year, raising hopes for India’s $283 billion IT sector that has seen muted demand from the U.S. as clients curtailed discretionary spending amid tariff-related uncertainty.
“In the last few weeks, our pipeline and bookings have increased,” CEO C Vijayakumar said in a conference call, adding that he expected “good bookings in the coming quarter as well”.
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.
What used to be discretionary spending by clients is becoming essential in some cases, driven by M&A and carve-outs, the CEO said.
Demand from clients in financial services and technology segments has also improved from the first quarter, he said.
HCLTech’s consolidated revenue rose 10.7% to 319.42 billion rupees ($3.60 billion) in the second quarter, beating the analysts’ average estimate of 313.55 billion rupees, data compiled by LSEG showed. Its engineering segment, which gained from a Volvo Cars deal, grew its revenue by 13.4%.
Jefferies analysts called the numbers an “all-round” beat and said the annual revenue growth, if achieved, would be the highest among the five largest Indian IT firms.
“Though the forecast has been retained, there are very few downside risks for HCLTech at the moment,” Centrum Broking analyst Piyush Pandey said.
Quarterly profit was 42.35 billion rupees, while analysts expected 42.39 billion rupees.
Peers Infosys , Wipro and LTIMindtree will report their results later this week.
($1 = 88.6820 Indian rupees)
(Reporting by Sai Ishwarbharath B and Haripriya Suresh; Editing by Sonia Cheema, Sahal Muhammed and Dhanya Skariachan)
