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HCL Tech Q3 Result | Profit comes in at Rs 3,442 crore, revenue grows to Rs 22,331 crore; meets… –

HCL Tech | Representative image

HCL Technologies Ltd. (HCL Tech), one of India’s largest IT Services Company, on January 14 reported a consolidated net profit of Rs 3,442 crore for the quarter ended December 2021 (Q3FY22) registering a 13.3 percent year-on-year (YoY) degrowth. On a sequential basis, the profit grew by 5.6 percent.

The company had reported a consolidated profit after tax (PAT) of Rs 3,969 crore in the corresponding quarter last year. In the preceding quarter, PAT stood at Rs 3,259 crore.

It may be noted that PAT for corresponding quarter of last year was higher by Rs 438 crore (USD 59.4 million) due to reversal of a prior years’ tax provision. The reversal was due to change in the method of calculating tax deduction, basis evaluation of judicial rulings.

Excluding this, PAT for current quarter is down 2.9 percent on-year in Rupee terms (down 4.7 percent YoY in dollar terms).

“As the global economy revives and we emerge from this crisis, we will continue to meet future challenges armed with our core beliefs of innovation and invention, driven by a strong faith in humanitarian values.”, said Roshni Nadar Malhotra, Chairperson, HCL Technologies Ltd while commenting on the company’s performance.

Its consolidated revenue during the September-December period stood at Rs 22,331 crore, up 15.7 percent over a year-ago quarter and up by 8.1 percent from the previous quarter.

Consolidated revenue in the corresponding period of last year was Rs 19,302 crore while in the preceding quarter, it was Rs 20,655 crore.

Revenue in dollar terms came in at USD 2.98 billion which was up 13.8 percent on a yearly basis and 6.7 percent sequentially.

Constant currency revenue was up 15 percent YoY and 7.6 percent QoQ.

The revenues for the company in dollar terms have grown at a compounded annual growth rate (CAGR) of 10.6 percent over the five year period from Dec’2017 to Dec’2021.

“We have delivered all round stellar performance this quarter with a revenue growth of 7.6% in constant currency QoQ, the highest recorded in the last 46 quarters”, said C Vijayakumar, Chief Executive Officer & Managing Director.

We continue to be in a vantage position to address sustained demand momentum as our investments on strategic priorities like digital, cloud & engineering capabilities and our talent development plans are showing strong returns, he added.

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It witnessed strong growth across its core business verticals, healthy deal wins and better operational efficiencies which aided in the sequential growth of the business.

Segmental and geographical performance

Services business – In constant currency terms the services business grew by 5.3 percent on sequential basis. The business has carried the growth momentum from the previous quarter when it had achieved a sequential growth of 5.2 percent.

Within the services business, Engineering and R&D Services witnessed a strong 19.7 percent on-year growth and a sequential growth of 8.3 percent (in constant currency).

The growth was driven by traction in digital engineering and IoT Works.

IT and Business Services too witnessed strong momentum and by 15.3 percent on a yearly basis, 4.7 percent QoQ (constant currency).

Strong activity was witnessed in cloud transformation and application modernization deals, which aided the growth of this business.

Products and Platforms business – The revenue for this business grew at 8.2 percent YoY and 24.5 percent QoQ (constant currency) driven by significant traction in HCL DX and HCL Commerce products.

The services business continues to be the mainstay for the company and contributed 86.5 percent of total revenues while products and platforms business contributed 13.5 percent.

All its business verticals witnessed strong double digit on-year growth led by Lifesciences & Healthcare which grew by robust 21.3 percent, Technology & Services grew 18.1 percent and its Energy, and Utilities & Public Services vertical grew by 14.8 percent during the quarter. Telecom, Media, Publishing & Entertainment vertical grew by 12.4 percent and Retail & CPG by 11.5 percent.

Geographically Americas region grew by 15 percent and Rest of World (ROW) by 25.8 percent.

Deal TCV and Client Additions

The quarter saw strong deal bookings and the company registered strong growth of 64 percent on a yearly basis by signing new deals worth USD 2.1 billion.

8 new large deals amounting to USD 1.97 billion were signed by its Services business (a YoY growth of 63 percent).

Its products business also won 8 new large deals during the quarter amounting to USD 167 million, a growth of 70 percent YoY.

The company made strong client additions during the quarter by adding 1 new client in USD 50 million+ bucket, 1 client in USD 20 million+ bucket, 8 clients in USD 10 million+ and 17 new clients added in USD 5 million+ category. In the USD 1 million+ bucket, the company was able to add 28 new clients during the quarter.


The margins for the company improved on a sequential basis but were down on a yearly basis.

EBITDA (earnings before interest, tax, depreciation and amortization) margin for the quarter came in at 23.4 percent which was down 3.7 percent from the year ago quarter and was up 8.3 percent from the previous quarter.

EBIT (earnings before interest and tax) margin at 19 percent was down 3.7 percent YoY and up 8.5 percent on-quarter.


The total headcount for the company at the end of the quarter stands at 197,777 employees with net additions during the quarter at 10,143 employees.

LTM attrition during the quarter rose to 19.8 percent compared to 15.7 percent in the previous quarter and 10.2 percent in the corresponding quarter of last year.

Cash generation

The company generated robust operating cash flow of USD 584 million and a free cash flow USD 521 million during the quarter.

Gross Cash stands at USD 2.7 billion and Net Cash at USD 2.1 billion at the end of the quarter.


The company has maintained its guidance of double digit revenue growth for FY22 and expects EBIT margins in the range of 19 – 21 percent.


The company has declared an interim dividend of Rs 10/share for the quarter. The record date for the payment of dividend will be January 22, 2022 with a payment date of February 4, 2022.


HCL Technologies on January 14 announced that it has signed a definitive agreement for the acquisition of leading Hungarian provider of data engineering services Starschema.

The IT firm claimed that the acquisition will bolster HCL’s capability in digital engineering and increase its presence in Central and Eastern Europe.

“Starschema will strengthen our data engineering capabilities, providing us with the ability to leverage its solutions and talent in Central and Eastern Europe,” HCL Technologies’ President Vijay Guntur said in a press release.

Starschema provides consulting, technology and managed services in data engineering to global 2000 companies in the US and Europe.

“As part of HCL’s full spectrum of technology services, we will leverage our expertise in data engineering and emerging data technologies to solve companies’ data challenges, through building fast, scalable solutions that make people more effective and companies more profitable. This

strategic move also represents exemplary career growth opportunities for our people,” Starschema’s founder and CEO Tamas Foldi said.

HCL also announced the acquisition of 51 percent equity stake in the German IT consulting company Gesellschaft für Banksysteme GmbH (gbs), along with apoBank, who would hold the balance 49% of equity. It paid Euro 99,000 for its 51% stake andthe transaction was completed with effect from January 05, 2022.

The HCL stock closed 0.2 percent up at Rs 1,337 at the National Stock Exchange on January 14. It generated returns of 30.1 percent in the past year and 1.4 percent during this financial year. The stock gained 15.4 percent in the past one month.