HCL Tech projects its revenue to grow between 6-8% in FY24
- HCL Tech issued a 6-8% revenue growth guidance for FY24 after reporting a growth of 13.7% in FY23.
- In dollar terms, its revenue was down 0.3% sequentially, while in constant currency terms, its revenue registered a decline of 1.2%.
- Its total contract value of large deals also fell to $2.07 billion in Q4, down 8% YoY and 12% sequentially.
AdvertisementIndicating that the Indian IT sector might be entering the slow lane, HCL Tech said on Thursday that it expects its constant currency revenue to grow between 6-8% in FY24. This was after Infosys said that it expects to grow at 4-7% in FY24 after missing its revenue guidance for FY23.
Unlike Infosys, the Noida-based IT company met its FY23 revenue forecasts. Its revenues grew 13.7% in FY23 in constant currency terms and it had guided it to be anywhere between 13.5-14%.
In dollar terms, HCL Tech’s Q4 revenue stood at $3.24 billion, down 0.3% sequentially. In constant currency terms, its revenue registered a fall of 1.2% sequentially, in line with analyst expectations.
In rupee terms, HCL Tech’s revenue in Q4 came in at ₹26,606 crore, down 0.4% sequentially and up 17.7% on a year-on-year basis. Its net profit for the quarter stood at ₹3,983 crore, down 2.8% sequentially, and up 10.8% YoY.
“We have delivered a stellar performance in FY23, crossing ₹1 lakh crore of revenue powered by industry-leading services growth of 15.8% in constant currency,” said C Vijayakumar, CEO and MD, HCL Tech.
Its operating margin fell sharply in Q4 to 18.1% in Q4 from 19.6% in Q3. For the last two quarters, it rose consecutively. Its net margin was down for both Q4 as well as the full FY23.
The company declared an interim dividend of ₹18 per share, making it the 81st consecutive quarter of dividend payout. The record date is set as April 28 and the payment date May 9.
HCL Tech’s FY23 at a glance
|Particulars||FY23||FY22||Q4 FY23||Q4 FY22|
|Revenue||₹1,01,456 crore||₹85,651 crore||₹26,606 crore||₹22,597 crore|
|Net profit||₹14,851 crore||₹13,499 crore||₹3,983 crore||₹3,593 crore|
Source: Company reports
Total contract value of large deals down
Despite bagging 13 large deals during the quarter, HCL Tech witnessed a decline in the total contract value (TCV) on both YoY as well as sequential basis. At $2.07 billion, its large deal TCV was down 8% YoY and 12% sequentially.
Despite this, the company’s CEO Vijayakumar maintained optimism, saying, “Our pipeline is near an all-time high, which reflects our differentiated business mix and strong client demand for our offerings.”
Most of the deal wins were in the over $5 million and $10 million categories, but HCL Tech also managed to bag two over $100 million deals during the quarter.
Geographically, Americas continued on a growth path in terms of their contribution to HCL Tech’s topline. Europe, on the other hand, registered a decline during Q4.
|Geography||Revenue contribution||Change (QoQ in constant currency terms)|
|Rest of the world||7.30%||-1.90%|
AdvertisementSource: Company reports
Segment-wise, financial services and life sciences continued to shine for HCL Tech, while manufacturing and technology services registered a sequential decline.
|Segment||Revenue contribution||Change (QoQ in cc terms)|
|Life sciences & healthcare||17.50%||3.60%|
|Technology & services||14.40%||-1.60%|
|Retail & CPG||9.00%||0.60%|
|Telecom, media & others||8.80%||-6%|
Source: Company reports
Attrition continues to cool down
In line with an industry-wide cool down in attrition rates, HCL Tech reported that its attrition levels at the end of Q4 stood at 19.5%, down from 21.7% in Q3.
Its hiring activity also picked up pace during Q4, with 3,674 net employee additions during the quarter, as compared to 2,945 additions in Q3. On a YoY basis, however, its hiring is still down 67%.
HCL Tech’s peers TCS and Infosys also reported a cool down in attrition in Q4. However, headcount at TCS increased marginally by 821 in Q4, while Infosys reported a decline of 3,611 during the quarter.
RIL’s Q4 to be driven by sustained momentum in retail business, O2C to see modest growth
Zomato's cost control efforts are hurting the startup: Strike at Blinkit to hurt revenues by 1%
Yes Bank has more shareholders than debit cards as retail investors continue to buy in
Popular on BI
- Va va vroom:Tata Technologies stock doubles investor money on debut
- Former US Secretary of State Henry Kissinger dies aged 100
- Women distributors rake in the moolah as investors across Bharat say Mutual Funds Sahi Hai
- Towards a brighter tomorrow: India's G20 Presidency and the dawn of a new multilateralism
- Exploring India's majestic glaciers: 10 frozen wonders