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.
Unlike Infosys, the Noida-based IT company met its FY23 revenue $4. 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$4.
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
Source: Company reports
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.
Source: Company reports
Segment-wise, financial services and life sciences continued to shine for HCL Tech, while manufacturing and technology services registered a sequential decline.
Source: Company reports
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$4 and$4 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.
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