HCLTech, India's third largest IT services exporter, reported a 10.9 per cent rise in fourth-quarter profit on Thursday, helped by strong deal momentum.

The company’s consolidated net profit rose to ₹3,983 crore ($484.93 million) for the quarter ended March 31.

Its earnings before income tax (EBIT) margins fell to 18.18 per cent from 19.6 per cent in the previous quarter. It expects EBIT margins of 18 per cent and 19 per cent for FY24.

Weak outlook for FY24

Announcing the quarterly results, HCLTech forecast lower-than-expected revenue growth for the current fiscal amid worries of recession in major markets like the US and Europe and global banking turmoil.

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HCLTech said it expects revenue to increase 6-8 per cent in the financial year ending March 2024 on constant currency basis, missing average analysts’ estimates of 10.42 per cent, according to Refinitiv IBES data.

The company’s weak outlook followed disappointing earnings from market leader Tata Consultancy Services and Infosys’ forecast of single-digit revenue growth this financial year.

Indian IT services companies, especially the larger ones, are likely to be hit by the turmoil in the US and European financial ecosystem since mid-March as they account for a lion’s share of revenue both by geography and sector.

European clients were delaying decisions, HCLTech had said back in January, well before the current turmoil.

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