IT major HCL Technologies on Tuesday reported a jump of 2.4 per cent year-on-year in its net profit to Rs 3,283 crore in the June 2022 quarter, against Rs 3,218 crore in the corresponding quarter last year. Its revenue from operations during April-June 2022 rose 16.9 per cent year-on-year to Rs 23,464 crore, compared with Rs 20,068 crore in the year-ago period.
On a quarterly basis, HCL Tech posted a decline of 8.8 per cent in the net profit, from Rs 3,599 crore in the March 2022 quarter. Its revenue from operations, however, saw a rise of 3.8 per cent year-on-year in revenue from operations to Rs 22,597 crore in the previous quarter.
Ebitda margin stood at 21.2 per cent at the end of the June 2022 quarter, while its Ebit margin came was 17 per cent. Ebitda stands for earnings before interest, tax, depreciation and amortisation.
HCL’s board of directors has also declared an interim dividend of Rs 10 per equity share of Rs 2 each of the company for the financial year 2022-23. “The Record date of July 20, 2022, fixed for the payment of the aforesaid interim dividend has been confirmed by the Board of Directors. The Payment date of the said interim dividend shall be August 2, 2022,” according to a BSE filing.
In dollar terms, HCL Tech’s revenue stood at $3,025 million in June 2022 quarter, a rise of 1.1 per cent quarter-on-quarter and 11.2 per cent year-on-year. The constant currency revenue growth stood at 2.7 per cent q-o-q and 15.6 per cent y-o-y in the Q1 of this fiscal. Meanwhile, in the quarter, services revenue (ITBS and ERS) climbed 2.3 per cent q-o-q and 19 per cent y-o-y in constant currency.
HCL Tech hired a total of 6.089 freshers during the quarter ended June 2022, with a total headcount of 210,966 employees at the global level.
The company’s attrition rate stood high at 23.8 per cent at the end of the first quarter of FY23. Sequentially, the attrition rate was slightly higher as compared with 21.9 per cent in the March 2022 quarter. On a year-on-year basis, the company’s attrition rate saw a big jump from the 11.8 per cent reported in the June 2021 quarter.
During April-June 2022, the total contract value of new deal wins stood at $2,054 million, registering 23.4 per cent year-on-year growth. Of this, services TCV was at $1,950 million enabled by seven net new large services deal wins. Products TCV stood at $104 million enabled by nine net new large product deal wins.
Annual contract value (ACV) was higher 17.9 per cent on a year-on-year basis. There were a significant number of small deals also during the June 2022 quarter.
C Vijayakumar, CEO and managing director of HCL Technologies, said, “We have started FY23 on a strong note with an overall growth of 2.7 per cent quarter-on-quarter and 15.6 per cent YoY in constant currency. Our services business continues to have robust growth momentum, growing at 2.3 per cent q-o-q and 19.0 per cent y-o-y in constant currency, driven by our digital engineering and digital application services with cloud adoption being a horizontal theme across all services and verticals.”
He added that the company’s new bookings grew 23.4 per cent year-on-year supported by a good mix of large- and mid-sized deals and the pipeline remains near record high. HCL’s operating margin came in at 17 per cent. “We have put in place the right measures that will improve our profitability going forward.”
Prateek Aggarwal, chief financial officer of HCL Technologies, said, “The key highlight of the quarter is the stellar growth in Services at 19 per cent y-o-y in CC. Products & platforms was 1.4 per cent up y-o-y in CC, 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 per cent. The board has approved a dividend on Rs 10 per share in accordance with our capital allocation policy.”
HCL Tech kept its revenue and Ebit margin guidance unchanged for the current financial year. It expects revenue to grow 12-14 per cent during 2022-23 in constant currency, while the Ebit margin is pegged at 18-20%.
Analysts expected HCL Tech to post revenue growth of 2.9 per cent quarter-on-quarter on a constant currency basis for the June 2022 quarter even as strong revenue growth is offset by productivity commitments, whereas its profit after tax (PAT) is likely to decline 7.9 per cent.