HCL Technologies Q4 Results: Revenue Dips Amid Signs Of Slowdown
India’s third largest IT services firm saw revenue dip 0.35% over the previous three months to Rs 26,606 crore.
HCL Technologies Ltd.'s net profit declined in the March quarter as revenue from engineering and R&D services as well as the software division faltered. However, the company posted numbers in line with analyst estimates.
India’s third largest IT services firm saw revenue dip 0.35% over the previous three months to Rs 26,606 crore in the quarter ended March 31, according to an exchange filing on Thursday. That compares with the Rs 26,855.67-crore consensus estimate of analysts tracked by Bloomberg.
HCL Technologies Q4 Results: Key Highlights (QoQ)
Revenue fell 0.35% to Rs 26,606 crore, as against an estimate of Rs 26,855.67 crore.
EBIT fell 7.5% to Rs 4,836 crore, as compared with an estimate of Rs 4,965.79 crore.
EBIT margin at 18.18% vs 19.58%. Analysts had estimated it at 18.49%.
Net profit declined 2.76% to Rs 3,983 crore, as compared with a forecast of Rs 3,882.68 crore.
In constant currency terms, the company saw revenue dip 1.2% quarter-on-quarter to $2,993.1 million during the three months to March.
Segment wise, the IT and business services posted 2.57% growth in segment revenue at Rs 19,632 crore. The engineering and R&D services, which form HCL Tech Services with the IT and business services, saw a decline of 3.4% in segment revenue at Rs 4,274 crore. HCL Software saw a decline of 13.69% in revenue at Rs 2,817 crore.
'Deal Pipeline At All-Time High'
The IT bellwether won 13 large deals, including 10 in services and three in software verticals. Of this, six came from new clients.
"Our net new bookings for FY23 grew 6.6%. Our pipeline is near an all-time high, which reflects our differentiated business mix and strong client demand for our offerings," said C Vijayakumar, chief executive officer and managing director at HCL Tech.
The number of clients in the over $100 million basket stood at 16, as compared with 17 as of December 2022. Top five clients contribute 11.6% to the company's revenue as of March, as against 10.3% in December 2022.
Attrition Moderates
During the March quarter of fiscal 2023, HCL added 4,480 freshers. Net employee addition during the period stood at 3,674 individuals, higher than 2,945 seen three months prior. Attrition rate moderated to 19.5% during the period under review from 21.7% in the previous quarter.
The total headcount at the company as of March 31, 2023, stood at 2,25,944, as against 2,22,270 as of Dec. 31, 2022.
"All these set us well in FY24 for healthy revenue growth in the 6-8% range, with operating margin in 18-19% range," Vijayakumar said.
Guidance For FY24
HCL Technologies has given a guidance of 6-8% for revenue growth in constant currency terms during fiscal 2024.
The IT major sees services revenue growth in the range of 6.5-8.5% in constant currency terms in the current fiscal. It expects EBIT margin to be between 18-19% during this period.
Dividend For FY24
The board of the company declared an interim dividend of Rs 18 per share for fiscal 2024. The record date for the dividend has been fixed at April 28, 2023, and it will be paid on May 9, 2023, the company said in its exchange filing.
On Thursday, shares of HCL Technologies fell 0.04% to Rs 1,037.55 apiece on the BSE, even as the benchmark Sensex ended 0.11% higher at 59,632.35.
