By Reuters | Updated: October 14, 2024
BENGALURU, Oct 14 (Reuters) – HCLTech (HCLT.NS) India’s third-largest IT services company, reported a bigger-than-expected second-quarter revenue on Monday amid a slight recovery in discretionary spending by clients.
The company’s consolidated revenue rose 8.2% on-year to 288.62 billion rupees ($3.43 billion) in the quarter ended Sept. 30. Analysts, on average, had expected a revenue of 285.5 billion rupees, as per LSEG data.
India’s $254-billion IT services sector has been struggling with clients cutting down tech spending on the back of weak macros and geopolitical risks, particularly on discretionary projects.
IT companies’ revenue is a key metric watched by analysts and investors. Several firms provide annual or quarterly revenue growth forecasts.
HCLTech’s net profit for the quarter rose 10.5% to 42.35 billion rupees, beating the analyst estimate of 40.69 billion rupees.
The company narrowed its revenue growth forecast for the fiscal year to 3.5%-5%, from 3%-5% previously.
Its new deal wins for the quarter stood at $2.22 billion, compared with $3.96 billion a year earlier. During the quarter, the company expanded its deal with printer and copier maker Xerox (XRX.O).
Advertisement · Scroll to continue
HCLTech’s chief executive C Vijayakumar said that growth during the quarter was distributed across verticals, geographies and offerings, according to a statement.
Revenue from the banking, financial services and insurance (BFSI) and life sciences verticals fell on-year, while others grew.
The Americas, from where HCLTech gets its highest portion of revenue, saw the highest growth.
IT companies have signalled that while the BFSI vertical is starting to see recovery and the U.S. rate cuts could help, the demand environment remains cautious.
Global IT bellwether Accenture (ACN.N) expects the “cautious environment” to continue into the next year.
HCLTech’s larger rival Tata Consultancy Services (TCS.NS) posted a lower-than-expected second-quarter profit due to weakness in the North American market, from where IT companies get a large portion of their revenue.
($1 = 84.0260 Indian rupees)
—
@ Thomson Reuters 2024
