HCL Tech’s net profit rises 6.3% sequentially, company increases FY23 revenue guidance

• HCL Tech’s revenue grew 5.2% sequentially to ₹24,686 crore while net profit grew 6.2% to ₹3,489 crore.
• The company increased its revenue guidance for FY23 from 12-14% to 16-17%, but tempered its margin guidance.
• Its attrition rate remained stagnant in Jul-Sep at 23.8%, while net employee addition stood at over 8,000.

Noida-based IT company HCL Technologies today reported a 6.2% increase in the second quarter net profit to ₹3,489 crore, sequentially. Its revenues too grew 3.8% sequentially to ₹24,686 crore.

Its net margins improved marginally to 14.1% from 14% in last quarter, but on a year-on-year basis, it's still down by 170 basis points.

Buoyed by good deal wins in the first half of the financial year, the IT firm upped its revenue guidance – it now expects revenue to grow between 16-17% in constant currency for FY23, as opposed to its earlier forecast of 12-14%.

However, it lowered EBIT margin guidance to 18-19% as opposed to its earlier forecast of 18-20%.

Its attrition rate remained stagnant in the September quarter at 23.8% as it was in the last quarter. The net employee additions for the quarter stood at 8,359.

The management indicated that the demand for IT services remained strong with a boost towards digital transformation.

HCL Tech said it won 11 large deals during the quarter with a total contract value (new deal wins) of $2.38 billion and 16% sequential growth, while revealing that it has bagged a ‘mega’ deal in the quarter. However, it added that this deal’s impact will be only visible in FY24.

“Our services business grew 5.3% QoQ and 18.9% YoY in constant currency, led by strong demand for cloud, engineering and digital services. This is a validation of the strategic choices we made and the effectiveness of our operational framework. Our bookings and pipeline continue to be very strong, which augurs well for our future growth,” said C Vijayakumar CEO & MD at HCL Technologies.
Source: Company reports

Roshni Nadar Malhotra, chairperson of the company said, “Our differentiated portfolio, we are well-positioned to leverage the opportunities that lie ahead in the digital-first world.”

Manufacturing was the only segment that grew double digit in the second quarter of the fiscal year.
HCL Tech’s board also recommended an interim dividend of ₹10 per share, with October 20 set as the record date.

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