HCL Technologies Q4 Results: Revenue Meets Estimates, Attrition Falls

HCL Technologies Ltd.’s fourth-quarter revenue rose in line with estimates, led by deal wins and digital transformation. Attrition fell.

The software company’s revenue increased 1.19% sequentially to Rs 22,597 crore in the three months to March, according to its exchange filing. That compares with the Rs 22,669.9-crore consensus estimate of analysts tracked by Bloomberg.

Its revenue in dollar terms rose 0.5% over the preceding three months to $2,993 million.

For the full fiscal, HCL met its own guidance of double-digit growth in constant currency. For 2022-23, it expects revenue growth at 12-14% in constant currency. It projects EBIT margin to be at 18-20% for FY23 compared with 19-21% in FY22.

Key Highlights: Q4 FY22 (QoQ)

• Net profit rose 4.39% to Rs 3,593 crore, against the Rs 3,354.3-crore forecast.

• EBIT fell 4.42% to Rs 4,069 crore.

• EBIT margin contracted to 18% from 19.1%.

• Declared an interim dividend of Rs 18 apiece.

HCL Technologies won deals worth $2,260 million in the fourth quarter compared with $2,135 million in the previous three months. It won six large service deals and four product deals from January to March.

"Our overall growth on YoY basis stands at 12.7% which is better than the guidance led by strong momentum in Digital, Cloud and Engineering
services," said C Vijayakumar, chief executive officer and managing director.

The IT company added 39,900 new employees during the year, taking its total headcount to 208,877. "We continue to invest proactively to create a larger talent pool to address the demand," Vijayakumar said.

Other Highlights (QoQ)

• IT and business services revenue rose 5.2% to $2,199 million.

• Engineering and R&D services revenue increased 3.9% to $490 million.

• Products & platforms revenue fell 24% to $304 million.

• Attrition fell to 9.9% from 19.8% as of March.

Peers such as Tata Consultancy Services Ltd. and Infosys Ltd., too, saw their revenue and net profit rise sequentially in the fourth quarter, but margin came under pressure as attrition inched up.

Infosys lowered its revenue growth guidance for FY23 compared with FY22, while TCS retained its double-digit forecast.

Shares of HCL Tech closed 9.8% higher before the results were announced on Thursday compared with a 1.49% gain in benchmark Nifty 50.