HCLTech: Profit Up, Growth Guidance Down

15 Jan 2024 , 08:56 AM

India’s third largest IT services provider HCLTech on January 12 reported a 6.23% year-on-year (YoY) improvement in net profit at Rs 4,351 crore for the third quarter of the current financial year.  This occurred in spite of higher-than-anticipated furloughs; the areas of concern were BFSI and technology.

The $50 million in additional revenue from the Verizon deal and the higher income from Germany’s ASAP post-acquisition contributed to the 13.51 percent sequential increase in net profit.

Compared to Q3FY23’s Rs 26,700 crore, the quarter’s consolidated revenue increased 6.54% YoY to Rs 28,446 crore. 

The company cut its revenue growth target for full year FY24 from the previous quarter at 5-6 % YoY in constant currency terms to currently 5-5.5%. This covers acquisition via ASAP as well. Guidance for revenue increase in Q1 was 6-8%.

HCL Tech has reiterated prior full-year margin target of 18-19% for FY24. Operating margin above corporate guidance range, coming in at 19.8%. Operating margin increased QoQ by 130 basis points.

C Vijayakumar, CEO and MD of HCLTech, ‘Our results this quarter have been remarkably strong with a revenue growth of 6.0% QoQ In CC driven by strong momentum in both services and software businesses.’

In order to meet changing customer expectations, he continued, the company is investing in Al, more specifically in generative Al and cloud native capabilities across all of our products and services.

‘In an uncertain demand environment, we remain confident of our continued growth momentum enabled by our business mix, our people and laser-sharp focus on delivering Innovation and hyper-automation to our clients,’ he stated.

For the fiscal year 2023–2024, the board of directors of the firm declared an interim dividend of Rs 12 per equity share.

The total contract value (TCV) of the company’s net new deals decreased to $1.92 billion for the quarter from $3.96 billion for the previous quarter. HCLTech’s TCV was $2.34 billion during the same quarter of the previous fiscal year.

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