HCL Tech Q2 profit rises 7% to ₹3,489 cr; revenue up 19.5%

IT major HCL Technologies Ltd has reported a 7.05% rise in its July-September quarter profit at ₹3,489 crore from ₹3,259 core during the same period last year, led by strong demand for cloud, engineering and digital services. The company's revenue from operations grew 19.5% on a year-on-year basis at ₹24,686 crore, while the constant current revenue saw 15% YoY growth.

HCL's US dollar revenue stood at $3,082 million, up 1.9% QoQ and up 10.4% YoY, while its services business grew 5.3% QoQ and 18.9% YoY in constant currency. EBIT margin jumped 18%, while the net margin grew 14.1%.

Ahead of the quarterly financial results, HCL Tech shares closed at ₹953.00, up 14.40 or 1.53%. The stock outperformed the sector by 0.62%. The earnings per share rose 3.7% on a year-on-year basis to ₹50.94, while operating cash flow was at 114% of the net income.

The HCL Tech board has also announced a dividend of ₹10 per share, the 79th consecutive quarter of dividend payout by the company. The record date for the payment of the interim dividend is October 20, 2022, while the payment will be made on November 2, 2022.

In terms of deals, HCL booked 11 large projects during the July-September quarter -- eight in services and three in products. The total commercial value of these bookings stands at $2,384 million, up 6% on a year-on-year basis.

“Our new brand identity brings razor-sharp focus to our go-to market strategy and execution capabilities to supercharge the digital transformation of our clients with the best of technology and people. With our differentiated portfolio, we are well-positioned to leverage the opportunities that lie ahead in the digital-first world,” says Roshni Nadar Malhotra, chairperson, HCL Tech.

HCL Tech added a total of 8,359 employees during the quarter, totalling 2,19,325. A total of 10,339 freshers joined the HCL workforce in the said quarter. HCL's attrition rate, like its peers, continues to be high at 23.8%.

In its guidance for FY23, HCL Tech says its services revenue is expected to grow 16-17% in constant currency, while its total revenue may rise by 13.5-14.5%. The company's EBIT margin guidance has also been revised to 18-19%.

HCL CEO and MD C Vijayakumar says HCL's bookings and pipeline continue to be very strong, which augurs well for its future growth. "These reflect our constant and continuing efforts to supercharge outcomes for all our stakeholders."

HCL Tech peers Wipro and Tata Consultancy Services (TCS) have also released their quarterly earnings numbers. Wipro reported a net profit of ₹2,659 crore in the quarter that ended September 30, 2022, a 9% year-on-year drop from ₹2,930 crore in the year-ago period.

The IT firm's consolidated revenue from operations rose 14.6% to ₹22,540 crore in the second quarter of FY23 compared with ₹19,667 crore in the corresponding period last fiscal. TCS has reported 18% year-on-year growth in revenue at ₹55,309 crore for the said quarter. The IT bellwether's profit crossed the ₹10,000 crore mark, recording a growth of 8.4% on a year-on-year basis.