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Informist, Monday, Jan. 13, 2025

 

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--HCL Tech Oct-Dec consol net profit INR 45.91 bln
--Analysts saw HCL Tech Oct-Dec consol net profit INR 45.52 bln
--HCL Tech Oct-Dec consol net profit INR 45.91 bln vs INR 42.35 bln qtr ago
--HCL Tech Oct-Dec consol revenue INR 298.90 bln vs INR 288.62 bln qtr ago
--HCL Tech To pay INR 18 per share interim dividend
--HCL Tech Apr-Dec consol net profit INR 130.83 bln vs INR 117.16 bln yr ago
--HCL Tech Apr-Dec consol revenue INR 868.09 bln vs INR 814.14 bln yr ago
--HCL Tech Adjusts FY25 constant currency sales growth guidance to 4.5-5%
--HCL Tech Adjusts FY25 constant currency services revenue to 4.5-5%
--HCL Tech Retains FY25 EBIT margin guidance of 18.0-19.0%
--HCL Tech Oct-Dec consol revenue up 3.8% on qtr in constant currency terms
--HCL Tech Oct-Dec consol EBIT INR 58.21 bln, up 8.6% on quarter
--HCL Tech Oct-Dec consol EBIT margin 19.5% vs 18.6% qtr ago
--HCL Tech Wins new deals worth $2.10 bln Oct-Dec vs $2.22 bln Jul-Sept
--HCL Tech Oct-Dec attrition 13.2% vs 12.9% quarter ago
--HCL Tech Total headcount up 2,134 in Oct-Dec to 220,755 as on Dec 31
--HCL Tech Oct-Dec svcs revenue up 2.2% on qtr in constant currency terms
--HCL Tech Oct-Dec HCLSoftware sales rise 18.7% QoQ in constant currency
--HCL Tech Oct-Dec fincl svcs sales dn 1.4% YoY in constant currency
--HCL Tech Oct-Dec tech, svcs sales up 7.6% YoY in constant currency
--HCL Tech Oct-Dec life, health sales down 1.1% YoY in constant currency
--HCL Tech Oct-Dec consol EBITDA INR 68.60 bln vs INR 63.69 bln quarter ago
--HCL Tech Oct-Dec revenue from Americas up 6.2% YoY in constant currency
--HCL Tech Oct-Dec revenue from Europe up 2.6% YoY in constant currency
 

By Rajesh Gajra

 

NEW DELHI – HCL Technologies Ltd. beat analysts' expectations on net profit for the quarter ended December, but trailed Street view on its topline. Revenues were affected due to weak sales traction in IT and business services.

 

In Oct-Dec, the company's consolidated net profit rose 8.4% on quarter to INR 45.91 billion. Analysts had expected the bottom line to be at INR 45.52 billion. The company reported a 3.8% sequential rise in constant currency consolidated revenue to $3.53 billion, while the consolidated revenue in Indian rupee terms was INR 298.90 billion, up 3.6% from a quarter ago. The revenue was lower than the Street's estimate of INR 300.18 billion.

 

The December quarter growth "is powered by broad-based performance across business lines as our clients are across verticals," Managing Director and Chief Executive Officer C. Vijayakumar said in a release. "Our new deal bookings were healthy during the quarter at $2.1B ($2.1 billion) with wins across services and software," he said.

 

Seasonal tailwinds, which typically aid the December quarter earnings of HCL Technologies, aided the company's performance for the quarter. But the revenue growth at 3.6% was lower than the corresponding growth rates in the December quarter of the previous four financial years.

 

On the profitability front, while the company's consolidated earnings before interest and tax margin at 19.5% for the December quarter was higher than 18.6% a quarter ago, it was lower than the 19.8% recorded in the December quarter of 2023-24 (Apr-Mar).

 

HCL Technologies' topline performance was below expectations because of a tepid constant currency revenue growth of 2.2% on quarter in the services segment, which accounted for 89% of the total revenue. Within the services segment, the revenue of IT and business services was up by only 1.5% sequentially, while engineering and research and development services increased by 5.4%. IT and business services revenue made up for 73% of the total revenue, while engineering and research and development services had a revenue share of 16%.

 

The company's revenue growth in Oct-Dec would have been lower but for the products segment, which the company calls HCLSoftware. This segment's constant currency revenue jumped 18.7% on quarter and accounted for 11.3% of the total revenue.

 

The increase in the bottomline of HCL Technologies was largely on account of an 8.6% rise in EBIT to INR 58.21 billion. The other income rose 4.6% on quarter to INR 4.77 billion. Staff costs increased 0.3% on quarter to INR 165.76 billion, while outsourcing costs rose 3.4% to INR 38.74 billion. Finance costs rose 27% sequentially to INR 1.66 billion and depreciation and amortisation expenses increased 3.2% to INR 10.39 billion. The tax expenses were up 6.1% on quarter to INR 15.38 billion.

 

Among HCL Technologies' business verticals in its services segment, financial services lagged others and its share in the services revenue declined to 20.3% in Oct-Dec from 20.5% in the previous quarter. The manufacturing vertical too saw its revenue share decline to 19.1% from 19.5%, and so was the case with lifesciences and healthcare, whose revenue share declined to 15.5% from 16.0%.

 

Other verticals, including telecommunications, recorded increases in revenue share. Geographically, the services' revenue share of the Americas region increased to 65.5% from 65.1%, while share of Europe declined to 28.2% from 28.4% and that of rest of the world fell to 6.3% from 6.5%.

 

Revenue contribution of the top 5 clients in the 12 months up to December increased to 12.6% as on Dec. 31 compared to 12.1% a quarter ago and 9.8% a year ago. The company added 2,134 employees in the December quarter, taking the total employee count to 220,755 at the end of December. The attrition rate in the trailing 12 months was 13.2% in Oct-Dec, up from 12.9% in the previous quarter.

 

On Monday, shares of HCL Technologies ended 0.3% lower at INR 1,989.40 rupees on the National Stock Exchange.  End

 

US$1 = INR 86.58

 

Edited by Saji George Titus

 

 

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