India's HCLTech misses Q3 revenue estimates, strengthens forecast.

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By Sai Ishwarbrat B and Haripriya Suresh

BENGALURU/MUMBAI (Reuters) – India’s HCLTech cut its full-year revenue growth forecast on Monday and reported lower-than-expected December quarter earnings on underperformance in its software business.

HCLTech now expects full-year revenue to grow 4.5%-5% in fiscal 2025, up from 3.5%-5% previously, on acquisitions.

The country’s third-largest software company by revenue completed the acquisition of certain IP assets from US-based HP Enterprise last month.

In a post-earnings press conference, C. Vijayakumar said, “We are seeing improvement in the demand environment (by 2025).

The software vertical, which accounts for 11 percent of total revenue, was “less than we expected,” he said.

HCLtech’s consolidated revenue rose 5.1% to 298.9 billion rupees ($3.45 billion) in the third quarter, falling short of the average analyst estimate of 300.68 billion rupees.

Shaji Nair, analyst at brokerage Mirae State Securities, said the operating margin would beat estimates.

“The Q3 performance and revised guidance reflects that the company is on track to deliver the top growth among Tier 1 IT companies for FY25,” he said.

India’s technology industry has faced a slowdown in growth over the past two years due to inflation and macroeconomic uncertainties.

However, analysts expect US-elect Trump’s trade policies to benefit Indian IT companies as the North American country accounts for more than 40 percent of the sector’s total revenue.

HCLTech’s quarterly net profit rose 5.5% to Rs 45.91 billion. Analysts had expected 45.82 billion rupees.

The company’s new deal revenue was $2.1 billion in the quarter, up from $2.22 billion in the previous quarter and $1.93 billion a year ago.

Shares of market leader Tata Consulting Services jumped 5.6% on Friday after the company’s chief executive signaled a possible revival in demand, although the company missed third-quarter estimates.

Wipro and Infosys will report numbers later this week.

HCL Tech shares were down 0.3% ahead of the results.

($1 = 86.6770 Indian Rupees)

(Reporting by Sai Ishwarbrat B and Haripriya Suresh; Editing by Eileen Soreng and Janane Venkatraman)