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Informist, Tuesday, Apr. 22, 2025

 

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--HCLTech: AI, generative AI now integral part of almost every deal 
--CONTEXT: HCLTech management's comments at post-earnings press conference 
--HCLTech: Many instances where co won higher wallet share with AI in deals 
--HCLTech: Revenue guidance bakes in conservatism due to macro conditions 
--HCLTech: FY26 fresher hiring to be significantly higher than FY25 
--HCLTech: Lower band of FY26 revenue guidance factors in macro conditions 
--HCLTech: Public sector big spend area, long-term strategy for co 
--HCLTech: Tariffs may hit consumer, manufacturing sectors first 
--HCLTech: Haven't seen any specific impact of tariff uncertainty so far 
--HCLTech: Attrition has stabilised at 12.5-13% in last 5 quarters 
--HCLTech: Discretionary client spending to be subdued in this environment 

 

NEW DELHI – HCL Technologies Ltd. plans to hire a significantly higher number of freshers in 2025-26 (Apr-Mar) compared to the previous financial year, the company said at a post-earnings press conference on Tuesday. This comes at a time when technology companies are tightening their purses amid increased uncertainty owing to tariffs imposed by the US.

 

HCL Technologies hired 7,829 freshers in FY25, taking its overall employee count to 223,420, it said in a press release. The Noida-based company will decide on the quantum of hiring on a quarterly basis given the uncertain environment, rather than setting an annual target. HCL Technologies aims to hire 2,000-3,000 freshers per quarter, its executive told reporters.

 

The US has imposed a slew of tariffs against a variety of products imported into the country but has paused reciprocal tariffs imposed on countries for 90 days. While HCL Technologies hasn't seen any impact of the tariff uncertainty so far, it expects this to play out much faster in the consumer and manufacturing verticals. However, the company warned that eventually, the impact of tariffs would spill over into all verticals.

 

"We believe discretionary spending will continue to be subdued in this environment. Geopolitical factors like tariff and de-globalisation are expected to impact IT services. In the coming months, it will be an important topic to observe and monitor the ongoing development," the company said. HCL Technologies, which usually provides a guidance band in a 2% range, has guided for revenue growth of 2-5% for FY26. The lower end of the 2-5% range considers the deterioration in the macroeconomic conditions, while the upper end considers certain deal closures, it said.  

 

In this uncertain backdrop, the company expects its customers to tighten their spending budget, especially on projects that lack return on investment. At this stage, HCL Technologies said it is very difficult to quantify the impact of tariffs. 

 

Attrition at HCL Technologies has stabilised at 12.5-13% in the last five quarters due to new programmes and initiatives aimed at attracting and retaining talent within the company, it said. Tech companies such as Tata Consultancy Services delayed their wage hike cycle for the ongoing financial year due to macroeconomic headwinds. HCL Technologies' wage hike cycle begins in October, and the company just concluded wage hikes for FY25 and intends to continue the cycle, it said, without commenting on whether it would follow TCS.

 

The company said artificial intelligence and generative AI were now integral components of almost every deal it made. In addition, there have been several instances in which the company won deals with higher wallet share with existing customers as it bakes in generative AI-induced productivity gains. "...with every renewal and every client conversation, we are able to ask for a higher wallet share of their spend as we proactively provide them the benefits due to generative AI," HCL Technologies said.

 

The company recently set up HCLTech Public Sector Solutions, its subsidiary dedicated to serving state and local governments in the US. The tech major said the sector is a long-term strategy for the company, as it carries big spending potential.

 

HCL Tech reported its March quarter earnings after market hours on Tuesday. The company earned a consolidated net profit of INR 43.07 billion for the quarter on revenue of INR 302.46 billion. Its shares closed at INR 1,479.90 per share on the National Stock Exchange, down 0.1%.  End

 

Reported by Anand JC

Edited by Avishek Dutta

 

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