The Indian tech industry continues to be in the limelight as HCL Technologies prepares to announce its fourth-quarter earnings today, April 22, 2025. Despite the anticipation, the markets have remained neutral, with little movement in HCL's stock price. This comes in the wake of earnings reports from peers such as TCS, Wipro, and Infosys, which have shown incremental growth, leading investors to eagerly await any signs of a turnaround from HCL Tech.
Market experts are forecasting a year-over-year revenue growth of 6–8% for HCL Tech, estimating revenues to fall between ₹30,450–₹30,730 crore in Q4. However, some analysts, as reported by Business Standard, predict a more subdued sequential growth of just 1.28%, anticipating revenues to reach ₹30,273.2 crore due to seasonal declines in product sales and persistent macroeconomic uncertainties.
On the profitability front, net profit is expected to grow by 7–9% year-on-year, estimated between ₹4,250 and ₹4,550 crore. Yet, sequentially, analysts suggest a potential decline of 1–2%. A significant concern for investors is HCL Tech's EBIT margin, which is projected to decline by 60–100 basis points, landing in the range of 16–16.5%. Factors contributing to this decline include salary increases and underperformance in the software business. Interestingly, the depreciation of the rupee might provide some cushioning against these margin pressures.
Looking ahead, investors will be particularly focused on HCL's revenue and margin guidance for the financial year 2026. They will also closely analyze details regarding new deal wins from the March quarter, any announcement of a final dividend for FY25, and management's insights into discretionary spending and the broader demand outlook amid global economic uncertainties and concerns over U.S. tariffs.
As of now, HCL Tech shares are trading at ₹1,475.50, reflecting a 0.50% drop from the opening price. The stock has lost 22.7% since the start of the year. Prior to the results, HCL Tech's share price had rallied more than 10% in the last three weeks, hitting resistance near its 21-day exponential moving average (EMA). Traders are likely to monitor price behavior near the 21 and 50 EMAs for further directional cues following the earnings announcement.
Overall, HCL Tech's Q4 results are poised to provide critical guidance on the company's resilience and growth prospects in a challenging global economic landscape. Investors are keenly watching for the bottom line numbers and management's guidance, which could indicate steady growth and margin resilience in the upcoming fiscal year.
In addition to HCL Technologies, several other companies are set to announce their Q4 results today, including AU Small Finance Bank, Havells India, and Tata Communications. HCL Technologies, India's third-largest IT services firm, is expected to report a sequential revenue drop in constant currency terms, largely due to seasonal weakness in its products business. Analysts predict a 3-5% revenue growth guidance, which will include a 100 basis points contribution from the CTG acquisition.
Investor focus will also be on the impact of macroeconomic deterioration on overall business performance, particularly the modest new deal total contract value (TCV) secured in recent quarters. Analysts anticipate an organic constant currency decline of 1.7% and a similar decline in USD terms quarter-on-quarter. They expect seasonally lower revenues for the products business, flat revenue for IT services, and modest growth in the Engineering Research and Development (ER&D) business.
HCL Technologies is set to announce its results after market hours today, with the financial results expected to be disclosed around 7:30 PM IST. Following the announcement, senior management will host a 60-minute earnings call to discuss the results and address investor questions. The board of directors has been meeting over the past two days to finalize the Q4 and full-year numbers for FY25, and discussions are ongoing regarding an interim dividend for FY26.
The stock performance of HCL Tech has been volatile over the past year, with a 52-week high of ₹2,012.20 reached on January 13, 2025, before a sharp retreat. The stock has fallen nearly 8% in the past month, although it gained 4% in the last five sessions. Overall, HCL Tech shares have declined by 19% over the past six months, despite a marginal uptick of nearly 1% year-on-year. In 2025, the stock has slipped by 23% so far.
As analysts prepare for the earnings announcement, there are mixed expectations regarding HCL's performance. Seema Srivastava, a Senior Research Analyst at SMC Global Securities, anticipates strong revenue growth driven by high demand for digital services, cloud computing, cybersecurity, and AI solutions. However, she also notes that EBITDA margins may see a slight drop due to higher wages and operational challenges. On the other hand, Sumeet Bagadia, Executive Director at Choice Broking, indicates that HCL Tech is currently trading around the crucial support level of ₹1,430, and a breakdown below this could lead to further declines.
Investors are advised to remain cautious and monitor the upcoming results closely, as the figures could significantly impact market sentiment and stock performance in the near term. With the backdrop of global economic uncertainties and competitive pressures in the tech sector, HCL Technologies' performance will be a key indicator of the company's future trajectory and resilience.
