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HCL Technologies Q2 Result | Profit rises 1.6% to Rs 3,265 crore, revenue up 2.9% at Rs 20,655 crore –

HCL Technologies, one of the largest software solutions companies in India, has reported a consolidated profit after tax of Rs 3,265 crore for the quarter ended September 2021, increasing 1.6 percent compared to Rs 3,214 crore in previous quarter and 3.9% compared to Rs 3,142 crore YOY.

Consolidated revenue came in higher at Rs 20,655 crore for the quarter, compared to Rs 20,068 crore in June 2021 quarter, increasing 2.9 percent QoQ and 11.1 percent YoY.

Dollar revenue came in at $2,791 mn with a growth of 2.6% QOQ and 11.3% YOY and a CAGR of 10.5% over the last 5 year period (LTM ended September).

“We believe in ‘The New Essential’ – the confluence of technology and human ingenuity – as the path forward. In the months ahead, we will further accelerate our actions and investments in emerging technologies, people and ESG to build a stronger and better future together.” This was the message sent out by Roshni Nadar Malhotra, Chairperson, HCL Technologies Ltd.

Growth across businesses

IT and business services contributed 72.6% to the total revenues, Engineering and R&D services contributed 15.7% and 11.7% was the contribution of Products & Platforms business. IT and business services growth in CC terms was 5.2% and 5.4% respectively on QOQ basis. Products and platforms business showed a de-growth of 8% sequentially. Combined services revenue grew by 5.2% QOQ and 13.15 YOY.

Growth in IT and business services was driven by acceleration in application modernization and cloud transformation deals while Engineering and R&D services grew on account of better traction in digital engineering.

“We have delivered a healthy performance this quarter marked by strong growth across our services portfolio led by our Digital Business, Engineering and Cloud Services,” said C Vijayakumar, Chief Executive Officer & Managing Director, HCL Technologies Ltd.

Growth across verticals and geographies

The company witnessed an all round YOY growth across verticals and geographies in constant currency basis. Growth momentum was led by Lifesciences & Healthcare (20.1% YoY cc), Telecommuncations, Media, Entertainment and Publishing (13.4% YoY cc), Manufacturing (11.9% YoY cc), Technology & Services (10.8% YoY cc).

Healthy Margins

EBITDA margin stood at 23.4% which was lower by 140 bps QOQ and by 230 bps YOY. Despite the lower margins this quarter, the EBITDA for the company has grown at a CAGR of 13.9% over the last 5 years (LTM ended September).

EBIT margin stood at 19% which was lower by 40 bps QOQ and by 250 bps YOY.

However, the company was able to improve its Net margin to 15.8% which was 120 bps higher QOQ and 400 bps YOY.

Also read – Infosys Q2 Results: Net profit jumps 11.9% YoY to Rs 5,421 crore

Strong Deal TCV and New Client Additions

Q2 TCV of New Deal wins for the company was at US$ 2.245 bn registering 38% YoY growth enabled by 14 net new large deal wins.

Company was able to add strong clients across all baskets.

On YoY basis, $100 mn+ clients are up by 1, $50 mn+ clients are up by 12, $20 mn+ clients are up by 18, $10 mn+ clients are up by 18, and $5 mn+ clients are up by 12.

HCL Technologies had signed several deals during the September 2021 quarter, including a five-year digital transformation deal with MKS Instruments Inc, another five-year IT transformation deal with Wacker Chemie AG, contract with Munich Re to transform digital workplace services in 40 countries, and multi-year agreement with Rogers to support operational stability.

“We had impressive client additions across all categories, reflecting strong demand and relevance of our offerings across all our client groups’, Vijaykumar added.

Employee Addition

The company had a net addition of 11,135 employees which is the highest in the last 24 quarters. The total employee strength now stands at 187,634 employees.

“Our robust pipeline and continued strong employee ramp up augurs well for our business momentum going forward” said Vijaykumar.

Cash Flow

The company generated an operating cash flow of $465 mn in the quarter and free cash flow of mn.

Gross Cash at the end of the end of this quarter stands at $2,696 mn and Net Cash at $2,171 mn.

Dividend Payout

The company announced a Payout policy that entails investor payouts of not less than 75% of Net Income cumulatively over 5 years FY 22 to FY 26. Following this policy, the company has declared a dividend of ₹ 10 /- per share for Q2. This is 75th consecutive quarter of dividend pay-out by the company.


Revenue is expected to grow in double digits for FY’22 and EBIT margins are expected to be in the range of 19% – 21%.

The stock price clocked 28.6 percent gains since the beginning of July 2021 and rallied 34 percent in the current financial year.

Also read – Wipro Q2 Result | Profit falls 9.6% to Rs 2,930 crore, firm sees IT services revenue growth at 2-4% in Q3