Tech Giants TCS, Infosys, HCL Technologies: What to Expect in Q4 Results

There is anticipation and speculation surrounding the upcoming fourth-quarter results of the leading tech giants in India – Tata Consultancy Services (TCS), Infosys, and HCL Technologies. Scheduled to announce their March quarter results on April 12 and 18, these companies are closely watched by investors and analysts for insights into the performance of the IT sector.

Tech Giants TCS, Infosys, HCL Technologies: What to Expect in Q4 Results
Tech Giants TCS, Infosys, HCL Technologies: What to Expect in Q4 Results

Analysts on Dalal Street have differing views on the IT sector’s performance for the fourth quarter. HDFC Securities believes that the sector’s growth is expected to reach a bottom in Q4FY24 and gradually recover in FY25, while Nirmal Bang Securities does not foresee a significant uptick in earnings in the near future.

According to HDFC Securities, growth disparities will persist within the sector, with guidance for FY25 likely factoring in an improved second-half performance. The brokerage projects that TCS may see a 6.6% year-on-year (YoY) and 3.1% quarter-on-quarter (QoQ) growth in adjusted profit after tax in Q4FY24. For Infosys, a 0.90% YoY and 0.60% QoQ decline in adjusted PAT is expected.

Despite the potential bottoming out of growth, HDFC Securities notes that valuations may limit significant upside in the near term. The IT sector’s valuations are currently 10% above the 5-year average and 35% higher than the 10-year average, indicating a level of caution among investors.

On the performance front, the Nifty IT index saw a 22% increase in FY24, underperforming the Nifty50 index. Notable gainers in the sector during the previous financial year included Persistent Systems, L&T Technology Services, Coforge, and HCL Technologies among others.

Nuvama Institutional Equities expects a modest quarter for Q4FY24, with revenue growth likely to range between -1.5% and 4.5%. While larger companies may see muted growth, Tier-2 players are anticipated to outperform. Deal flow is expected to remain stable, with a focus on the execution of recently secured deals.

Looking specifically at HCL Technologies, Nuvama anticipates a 0.3% QoQ growth in constant currency terms and a 0.7% QoQ growth in dollar terms. Revenue growth is expected to be driven by services, particularly the Verizon deal. The brokerage also projects a YoY revenue growth in CC terms for HCL Technologies.

In the case of Infosys, Nuvama predicts a slight decline in EBIT margin QoQ, primarily due to wage hikes and other factors. The company is likely to provide guidance for FY25, indicating modest revenue growth and margin expectations. Nuvama remains positive on key players in the sector, including Coforge, Persistent, Infosys, TCS, HCL Tech, and LTIMindtree.

As the anticipation builds for the Q4 results of these tech giants, investors and analysts will be closely monitoring the announcements for indications of the IT sector’s trajectory in the coming year.

Disclaimer: Financeyogi.net provides financial information for educational purposes only. We do not offer personalized financial advice and are not responsible for any decisions made based on the information provided. Users should consult with a qualified financial advisor before making any financial decisions.
Ajith Kumar

Ajith Kumar

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