Will the earnings beat analysts’ estimates? Here is what Citi, Macquarie, BofA, Kotak Securities expect ahead of HCL Tech Q2 FY21 earnings:-
 
CLSA expects $ 2489 mn Revenue which is 5.6% higher than last quarter (QoQ) and 0.1% higher than last year (YoY). Margins are expected to come in at 20.7% which is 21 bps more than last quarter (QoQ) and 78 bps more than last year (YoY).  The profit is expected to be around Rs 3038 cr which is 3.9% higher than last quarter (QoQ) and 14.6% higher than last year (YoY).

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Citi expects dollar revenue growth of 6% (QoQ) to $2498 mn in Q2 FY21 vs $2356 mn in Q1 FY21 and improved 0.5% (YoY) from $2486 mn in Q2 FY20. Revenue in rupee terms will improve 3.6% (QoQ) to Rs 18,484 cr from Rs 17,841 cr and will grow 5.5% from Rs 17,528 cr (YoY). EBIT margin will recover 3 bps to 20.5% from 20.5% (QoQ) and 59 bps from 20% (YoY). Profit is expected to improve 2.1% (QoQ) to Rs 2983.7 cr from Rs 2923 cr and 12.5% from Rs 2651 cr (YoY). Citi expects revenue growth of 3.7% in CC terms (230 bps cross currency benefit QoQ). Margins likely to remain flattish, post the good performance last quarter. Key things to watch is FY21 revenue outlook deal wins , P&P (Products and platforms) and IMS (Integrated management system) outlook.
 
Macquarie expects dollar revenue growth of 5.4% (QoQ) to $2483 mn in Q2 FY21 from $2356 mn in Q1 FY21 and remains flat (YoY) from $2486 mn in Q2 FY20. . In CC, this would translate to growth of 3.6% QoQ and degrow by 1.6% YoY. Our growth assumption models 6% for IT services, 6% for ER&D (Engineering R&D)and 3% for products business in US $ terms (QoQ). Revenue in rupee terms will improve 4.4% (QoQ) to Rs 18,625 cr from Rs 17,841 cr and grow 6.3% (YoY) from Rs 17,528 cr. EBIT margin will remain flat at 20.7% (QoQ) and will improve 20 bps from 20,5% (YoY) and improve 70 bps from 20% last year Q2 FY20. Profit is expected to improve 3% (QoQ) to Rs 3013 cr from Rs 2925 cr and to improve 13.3% from Rs 2659 cr (YoY).
Macquarie says key things to watch out for would be-
1) Deal booking and pipeline
2) Medium-term demand outlook including cloud transformation and vendor consolidation
3) Outlook on higher outsourcing and offshoring potential post the pandemic
4) Pricing outlook
5) M&A strategy
 
BofA expects dollar revenue to grow 6.2% (QoQ) to $2501 mn in Q2 FY21 and to grow 0.6% (YoY). Revenue in rupee terms will improve by 3.7% (QoQ) to Rs 18,505 cr and improve 5.6% (YoY). In CC terms, this would translate to 230 bps QoQ improvement. EBIT margin will sequentially improve by 30 bps to 20.8% from 20.5% (QoQ) and will improve by 87 bps (YoY) from 20%. Profit is expected to improve 1% (QoQ) to Rs 2405 cr and degrow by 6% (YoY).
 

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Kotak Sec expects $ 2485 mn Revenue which is 5.5% higher than last quarter (QoQ).
 
Nomura expects $ 2484 mn Revenue which is 5.5% higher than last quarter (QoQ) and 0.1% lower than last year (YoY). Margins are expected to come in at 20.8% which is 20 bps higher than last quarter (QoQ) and 80 bps more than last year (YoY). The profit is expected to be around Rs 2989 cr which is 2.2% higher than last quarter (QoQ) and 12.7% higher than last year (YoY).

(Authored by Rahul Kamdar)