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HCL Technologies Q3 Results: Revenue Meets Estimates, Margin Flat – BloombergQuint

HCL Technologies Ltd.’s revenue rose, in line with estimates, in the third quarter, led by a recovery in products business, deal wins and rising demand for digital services.

The software services exporter saw its revenue increase 8.1% sequentially to Rs 22,331 crore in the three months ended December, according to its exchange filing. That compares with the Rs 21,631-crore consensus estimate of analysts tracked by Bloomberg.

Its revenue in dollar terms rose 6.7% over the preceding three months to $2,977 million.

“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,” C Vijayakumar, chief executive officer at HCL Tech, said in the filing.

Key Highlights: Q3 FY22 (QoQ)

  • Net profit rose 5.6% to Rs 3,442 crore, against the Rs 3,374-crore forecast.

  • EBIT increased 7.9% to Rs 4,257 crore.

  • EBIT margin remained flat at 19.1%.

  • Declared an interim dividend of Rs 10 apiece.

HCL Tech kept its revenue and EBIT margin guidance for the ongoing fiscal unchanged. It expects revenue to grow in double digits in constant currency in FY22, while EBIT margin is projected to be between 19% and 21%.

Other Highlights (QoQ)

  • IT and business services revenue rose 4.7% to $2,103 million.

  • Engineering and R&D services revenue increased 8.3% to $473 million.

  • Products & Platforms revenue jumped 24.5% to $402 million.

  • Attrition inched up to 19.8% from 15.7% as of September.

HCL Tech won new contracts worth $2,135 million with a net eight large services deals and eight significant product deals in the October-December quarter. It added 10,143 new employees, taking its total headcount to 1,97,777.

“We continue to be in a vantage position to address sustained demand momentum as our investments on strategic priorities like digital, cloud and engineering capabilities and our talent development plans are showing strong returns,” C Vijayakumar, chief executive officer and managing director, said.

Peers such as Tata Consultancy Services Ltd., Infosys Ltd. and Wipro Ltd. saw their revenue and net profit rise sequentially in the third quarter, but margin remained under pressure and attrition inched up. Infosys raised its revenue growth guidance for FY22, while TCS retained its double-digit forecast. Wipro guided for a 2-4% sequential growth.

Shares of HCL Tech closed 0.32% lower before the results were announced on Friday compared with a flat Nifty 50.