HCL Tech – Q2FY25 Results review by Sagar Shetty, Research Analyst, StoxBox

HCL Tech Q2FY25 Results Review:
HCL Tech reported healthy financial performance during the quarter, beating estimates on all fronts. The topline growth was driven by key deal wins across verticals, product offerings and geographies, with the Telecommunications, Media, Publishing & Entertainment vertical recording a solid 61.2% YoY CC growth, while Financial Services continued to be under pressure due to State Street disinvestment. The EBIT margin also stayed within the guidance range of 18-19% driven by positive operating leverage in the ER&D business. A lower attrition rate further highlights easing concerns on the talent pool. The management also raised its lower-end guidance for revenue growth from 3% to 3.5%, highlighting its growing confidence in the business environment, especially the next-generation technologies. We expect visible growth in H2FY25, with the impact of State Street receding. Going ahead, the management’s commentary on aspects like demand environment, TCV outlook, guidance for H2FY25 and attrition rate would be key factors to watch.