HCL Technologies (HCLTECH)
Why the stock moved
Strong products & platforms revenue growth of 8.2% driven by DWS (Digital Workplace Services) and Cloud Native Labs.
In-depth analysis
HCL Tech continues to demonstrate resilience with its unique services-led and products-led business model. The products & platforms segment, which includes software products and IP partnerships, grew 8.2% YoY and now contributes 28% of total revenue. Services segment showed stable growth at 4.5% with strong deal wins in manufacturing and life sciences.
Key highlights
- Products Growth: Products & Platforms segment grew 8.2% YoY
- Deal Wins: Secured $2.3 billion in new TCV bookings
- Cloud Native Labs: Revenue run-rate crossed $500 million
- Operating Margin: 19.5%, industry-leading performance
- Dividend Payout: Announced 150% dividend, total payout ₹6,800 crores
Outlook
Company maintains 6-8% revenue growth guidance for FY25. Strong focus on cloud, AI, and digital workplace services. Partnership with IBM for hybrid cloud solutions expected to drive future growth. Products business provides stable revenue base.
Risk factors
Dependence on Mode 1 (legacy) services which face pricing pressure. Products business revenue tied to third-party vendors. Slower enterprise tech spending in Europe could impact services revenue.