More Stories

Informist, Monday, Oct. 14, 2024

 

Please click here to read all liners published on this story

--HCL Tech Jul-Sept consol net profit INR 42.35 bln 
--Analysts saw HCL Tech Jul-Sept consol net profit INR 40.29 bln 
--HCL Tech Jul-Sept consol revenue INR 288.62 bln 
--HCL Tech to pay INR 12 per share interim dividend 
--HCL Tech Jul-Sept consol net profit INR 42.35 bln vs INR 42.57 bln qtr ago 
--HCL Tech Jul-Sept consol revenue INR 288.62 bln vs INR 280.57 bln qtr ago 
--HCL Tech Apr-Sept consol net profit INR 84.92 bln vs INR 73.66 bln yr ago 
--HCL Tech Apr-Sept consol revenue INR 569.19 bln vs INR 529.68 bln yr ago 
--HCL Tech retains FY25 EBIT margin guidance of 18.0-19.0% 
--HCL Tech Jul-Sept revenue up 1.6% on qtr in constant currency terms 
--HCL Tech Jul-Sept consol EBIT margin 18.6% vs 17.1% qtr ago 
--HCL Tech wins new deals worth $2.22 bln in Jul-Sept vs $1.96 bln Apr-Jun 
--HCL Tech Jul-Sept attrition 12.9% vs 12.8% quarter ago 
--HCL Tech total headcount down 780 in Jul-Sept to 218,621 as on Sept 30 
--HCL Tech sees FY25 constant currency sales up 3.5-5.0%
--HCL Tech: Jul-Sept HCLSoftware sales rise 1.4% QoQ in constant currency 
--HCL Tech Jul-Sept manufacturing ops sales up 7.1% YoY in constant currency 
--HCL Tech Jul-Sept fincl svcs sales down 4.5% YoY in constant currency 
--HCL Tech Jul-Sept services sales up 1.6% QoQ in constant currency 
--HCL Tech CEO:Pipeline is very strong, includes data, AI, digital engg, SAP 
 

 

By Darshan Nakhwa 

 

MUMBAI – HCL Technologies Ltd. Monday reported better-than-expected performance for the September quarter on healthy growth in new deals, cross currency tailwinds, and improvement in the high margin HCLSoftware business. The company also revised its revenue growth guidance for 2024-25 (Apr-Mar) to 3.5-5.0% in constant currency terms from 3.0-5.0% in Apr-Jun.

 

India's third-largest information technology provider's consolidated net profit came in at INR 42.35 billion, down 0.5% on quarter but higher than the Street's estimate of INR 40.29 billion. Consolidated revenue rose by nearly 3% on quarter to INR 288.62 billion, surpassing analysts' estimate of INR 286.03 billion. The sales were 1.6% higher on quarter in constant currency terms. The sales were driven by new deal wins of $2.22 billion during the September quarter, which were higher compared to $1.96 billion deals won in the June quarter.

 

The company's services business revenue rose 1.6% on a sequential basis in the September quarter. The services business, which includes IT, and engineering and research and development services, contributes around 90% to the consolidated top line of HCL Technologies. The rest comes from HCLSoftware, which houses the high-margin products and platforms division. Among divisions, IT and business services was the best performer with a sequential growth of 1.8% in constant currency sales in Jul-Sept, followed by HCLSoftware's 1.4% growth.

 

In Jul-Sept, the company's operating margin, calculated on earnings before interest and tax, expanded by 149 basis points sequentially to 18.6%. Analysts expected the company's margin to expand by 60 bps in Jul-Sept. In their pre-earnings reports, analysts expected divestment of a stake in a joint venture with State Street International Holdings and weakness in HCLSoftware to limit the expansion in the company's profitability for the September quarter. The company has retained its EBIT margin guidance of 18-19% for FY25.

 

"We delivered a strong quarter with revenue growing 1.6% QoQ (quarter-on-quarter) in constant currency and EBIT coming in at 18.6%. This growth was well distributed across verticals, geographies, and offerings," Chief Executive Officer and Managing Director C. Vijayakumar was quoted as saying in a press release by the company. "HCL Software has delivered a stellar performance of 9.4% YoY (year-on-year) this quarter and 6.4% growth in H1 FY25 (first half of financial year) in constant currency, demonstrating the increasing relevance of our products for the digital economy," he said.

 

"Our (deal) pipeline is very strong, including Data & AI, Digital Engineering, SAP migration and efficiency-led programs. Our GenAI offerings like AI Force and AI Foundry are resonating very well with our clients and should be drivers of efficiency, growth, and innovation over the medium term," Vijayakumar said.

 

The company's total expenses rose marginally by 0.8% on quarter to INR 236.31 billion. While employee costs--the biggest expense incurred by the company--inched up by 0.7% on quarter to INR 165.23 billion, its outsourcing costs rose by 6% sequentially to INR 37.48 billion. However, the company's other expenses fell by 6.8% sequentially to INR 17.56 billion. The tax outgo for the quarter was INR 14.50 billion compared to INR 14.48 billion in Apr-Jun.

 

The company's employee headcount fell by 780 during the quarter to 218,621. The trailing 12-month attrition rate was 12.9% compared with 12.8% in Apr-Jun and 14.2% in Jul-Sept of 2023.

 

On a year-on-year basis also, the company's financial performance was better. Net profit for the September quarter rose 10.5% on year and sales grew 8.2%. Analysts had expected the company's net profit to rise 5.1%, with a sales growth of 7.2%. The company's consolidated sales were up 6.2% on year in constant currency terms.

 

The company's largest vertical, financial services, saw sales decline 4.5% on year in constant currency terms and lifesciences and healthcare sales fell 2.8%. In comparison, manufacturing sales rose 7.1% on year in constant currency terms and technology and services sales rose 5.6% on year.

 

For Apr-Sept, HCL Technologies reported a net profit of INR 84.92 billion, up 15.3% on year. Revenue from operations were INR 569.19 billion, up 7.5% on year. The company announced an interim dividend of INR 12 per share. On Monday, its shares ended almost 1% higher at INR 1,855.90 on the National Stock Exchange. The company announced the earnings post market hours. End

 

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.