ET NowIn an interview with ET Now, Ankit Pandey, IT Analyst, Quant Broking, shares his views on HCL Tech’s quarterly numbers. Excerpts:
ET Now: Your first take on the HCL Tech quarterly number?
Ankit Pandey: Our estimate for HCL Tech revenue growth was Rs 1,409 crore. So the number that they have come out with is pretty much in line. We expected about a 100 basis points decline, wherein the PAT number is closer to Rs 1,800 crore versus our expectation of Rs 1,620 crore. This may be due to a higher margin or forex loss figure. We were expecting a forex loss figure of about Rs 33 crore versus Rs 142 crore last quarter. We would attribute the decline in margin largely to rupee appreciation as well as the visa cost.
So it could be that the numbers have been offset by utilisation, where I don’t think there is much room. They could have been offset by operational efficiencies and that would be interesting to watch out for.
ET Now: Do you think somewhere it is the forex part which has done the trick for HCL Tech?
Ankit Pandey: The EBIT margin is about 24.2%, whereas we expected it to be close to 23.5%. That is the large beat - close to 70 basis points or maybe closer to Rs 50 crore.
ET Now: The dollar revenue is at about 3.4%. It is lower than TCS, but better than Infosys. So does HCL Tech now stand midway?
Ankit Pandey: The way to read that is to check the growth in the infrastructure segment, which has fallen from, say, 8% to 10% sequentially about a couple of quarters ago to now maybe 5% to 6%, which still is an extremely strong and robust growth. However, the rest of the numbers - including the software and BPO arm - have been helping to keep the overall sequential growth at about 3-3.5% consistently for many quarters.
Therefore, the rate is in line with expectations and indeed a healthy one. HCL Tech will keep up with the industry level growth or even do better than that. To an extent, I am pretty pleased with the numbers.
ET Now: Your first take on the HCL Tech quarterly number?
Ankit Pandey: Our estimate for HCL Tech revenue growth was Rs 1,409 crore. So the number that they have come out with is pretty much in line. We expected about a 100 basis points decline, wherein the PAT number is closer to Rs 1,800 crore versus our expectation of Rs 1,620 crore. This may be due to a higher margin or forex loss figure. We were expecting a forex loss figure of about Rs 33 crore versus Rs 142 crore last quarter. We would attribute the decline in margin largely to rupee appreciation as well as the visa cost.
So it could be that the numbers have been offset by utilisation, where I don’t think there is much room. They could have been offset by operational efficiencies and that would be interesting to watch out for.
ET Now: Do you think somewhere it is the forex part which has done the trick for HCL Tech?
Ankit Pandey: The EBIT margin is about 24.2%, whereas we expected it to be close to 23.5%. That is the large beat - close to 70 basis points or maybe closer to Rs 50 crore.
ET Now: The dollar revenue is at about 3.4%. It is lower than TCS, but better than Infosys. So does HCL Tech now stand midway?
Ankit Pandey: The way to read that is to check the growth in the infrastructure segment, which has fallen from, say, 8% to 10% sequentially about a couple of quarters ago to now maybe 5% to 6%, which still is an extremely strong and robust growth. However, the rest of the numbers - including the software and BPO arm - have been helping to keep the overall sequential growth at about 3-3.5% consistently for many quarters.
Therefore, the rate is in line with expectations and indeed a healthy one. HCL Tech will keep up with the industry level growth or even do better than that. To an extent, I am pretty pleased with the numbers.
Get Unlimited Access to The Economic Times
