HCL Tech Q1 net profit grows 2.4% to ₹3,283 cr

Indian IT services provider HCL Technologies reported a 2.4% increase in its consolidated net profit for the quarter ended June 2022. The Noida-headquartered company posted a consolidated net profit of ₹3,283 crore during the period under review, compared with ₹3,205 crore in the year-ago period. In sequential terms, however, the company saw a decline of 8.6% in net profit; the net profit in the March quarter was ₹3,593 crore.

Revenue from operations for Q1 FY23 stood at ₹23,464 crore, up 16.9% year-on-year from ₹20,068 crore. Total income increased to ₹23,873 crore from ₹20,323 crore a year ago. Profit margin slipped to 14% from 16% recorded a year ago.

Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 1.7% to ₹4,975 crore during the June quarter this fiscal, compared with ₹5,062 crore in the corresponding period of the previous fiscal. EBITDA margin slipped to 21.2% from 25.3% during this period.

At the end of the June quarter, the total headcount at HCL Technologies was 210,966, up 19.5% YoY.

The company saw strong client addition across all categories, it says in a statement. Number of clients on YoY basis in the $100 million+ basket increased by 3, in the $50 million+ basket by 5, and $20 million+ basket up by 23.

The company has projected revenue growth of 12-14% for the financial year 2022-23, and expects EBIT margin to rise between 18% and 20% during this period.

“We have started FY23 on a strong note with an overall growth of 2.7% QoQ and 15.6% YoY in constant currency. Our services business continues to have robust growth momentum, growing at 2.3% QoQ and 19.0% YoY in constant currency, driven by our digital engineering and digital application services with cloud adoption being a horizontal theme across all services and verticals,” says C. Vijayakumar, CEO and managing director, HCL Technologies. “Our new bookings grew 23.4% YoY supported by a good mix of large and mid-sized deals and our pipeline remains near record high. Our operating margin came in at 17.0%. We have put in place the right measures that will improve our profitability going forward.”

“The key highlight of the quarter is the stellar growth in Services at 19% YoY in CC. Products & Platforms was 1.4% up YoY in constant currency, excluding the divested/discontinued business. Our cash generation continues to be robust at operating cash flow (OCF) of $2,013 million and free cash flow (FCF) of $1,762 million, on LTM basis, with OCF /NI at 112%,” says chief financial officer Prateek Aggarwal.

The board of HCL Technologies has also announced an interim dividend of ₹10 per equity share of ₹2 each for the fiscal 2023. The record date for the payment of this interim dividend is July 20, 2022; it will be paid on August 2, 2022.