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HCL Technologies Analyst Meet: Increasing focus on TMT vertical
Overall: The company in the medium term, expects Industry to witness a high single digit growth and aspires to grow at a double digit and is focusing on delivering industry-leading growth with plans to increase its bookings run rate to US$2.3-2.5 billion from the current US$2 billion levels
Demand outlook: The demand environment is seeing a reversal in trend, with the TMT vertical seeing increased discretionary spending, BFS seeing some uptick in demand and the rest of the verticals being driven by cost optimization deals.
Margin measures: For medium to long term margins expansion, it has launched Project Ascend which focuses on driving efficiencies to fund future growth and includes measures such as hiring construct, delivery model, G&A optimisation enabled by AI, expanding new products areas etc. to enhance growth and profitability.
TMT – a core area: TMT vertical is expected to witness strong traction (CQGR over 9 quarters of AMJ’22 – AMJ’24 is 1.8% - industry leading growth) for the next two years on the back of the telecom players' transformation to innovate & monetize their business, and an increased focus in the semiconductor engineering business.
Near term outlook: The management for FY25 has given revenue growth guidance in the range of 3-5% YoY in CC terms while the margins are expected to be within the previously guided margin band of 18-19%. We expect earnings growth of ~7.3% over FY24-26, HCL diversified portfolio and increased traction for its GenAI platforms remains a key catalyst of its long-term growth.
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