India’s third largest IT company HCL Technologies on Friday reported a flat year-on-year growth in net profit in the March quarter at Rs 3,986 crore.
However, the company posted an 8.4 per cent decline in net profit on a sequential basis, amid rising employee cost and tightening IT spends around the world.
The company described the performance as “decent” in view of the global macroeconomic conditions.
The company posted a consolidated net profit of Rs 3,986 crore in the fourth quarter of FY24 as against Rs 3,983 crore in the same period last year.
Sequentially, the company’s profit declined 8.4 per cent from Rs 4,350 crore in the October-December period, the company said in a filing.
HCLTech CEO C Vijayakumar said he believes the company has delivered decent results.
“From a business performance perspective, when we started the year, there was cautious optimism around growth in line with the market momentum at that time.
“There were obviously signals of reduced discretionary spend and slowdown in some key verticals.
“We as a company reacted to that uncertain environment with agility and flexibility that was required… we have delivered decent growth with good control over profitability,” he said.
He attributed the growth to good momentum in the company’s services and software businesses, and said HCLTech grew the fastest in the industry in terms of organic growth.
Top performing verticals were financial services, which grew at 12.1 per cent, followed by manufacturing that grew 9.8 per cent.
Pre-tax profit (EBIT) at Rs 5,018 crore was down 10.6 per cent quarter-on-quarter, but up 3.8 per cent when compared to the previous year.
The company gave a guidance of 3-5 per cent growth in revenue in constant currency terms for FY25 and an EBIT margin of 18-19 per cent.
EBIT margin (per-tax profit as percentage of revenue) fell sequentially to 17.6 per cent in the fourth quarter from 19.8 per cent and from 18.1 per cent a year ago.
The Noida-based company’s geography growth was led by the Americas at 6.8 per cent year-on-year in constant currency, followed by Europe at 5.5 per cent, while rest of the world declined 7.1 per cent.
The company’s employee cost rose 11.5 per cent in the quarter while the attrition rate at 12.4 per cent was lower than 19.5 per cent in the fourth quarter of last year.
For Q4FY24, HCLTech’s revenue from operations stood at Rs 28,499 crore, a 7.11 per cent rise from Rs 26,606 crore last year.
For the full fiscal year (FY24), HCL Tech reported a 5.73 per cent rise in net profit to Rs 15,702 crore.
The company posted Rs 109,913 crore revenue in FY24, up 8.33 per cent from the previous fiscal.
“…we have translated this growth into even higher value creation for our shareholders with our OCF coming at USD 2,711 million, up 21.6 per cent YoY and FCF at $2,584 million, up 27.7 per cent YoY.
“As we look ahead, global enterprise technology spend will only grow with adoption of AI,” Vijayakumar said.
He further said HCLTech is positioned to capitalise with its AI-led propositions, global delivery model and “ideal mix of technology services and products”.
“While there was notable growth across various digital business practices, the one that stood out during the year was cloud and cybersecurity… we had phenomenal growth both in cloud migration, to hyperscalers as well as setting up hybrid cloud environments for our clients,” he added.
The company’s total headcount stood at 227,481 in Q4FY24, up 1,537 on a sequential basis.
HCLTech chief people officer Ramachandran Sundararajan said the company anticipates hiring for FY25 to be on similar lines as the last fiscal, and expects an addition of about 10,000 freshers in FY25.
The top boss said the company had an excellent quarter from the booking perspective.
“During the year, we had a total of 73 large deals, including 21 during this quarter, across products and services,” he said.
HCLTech on Thursday announced the appointment of Lee Fang Chew as an Independent Director of the company, effective from April 25, 2024.
The board declared an interim dividend of Rs 18 per equity share of Rs 2 each of the company for the FY25, according to a BSE filing.
The payment date of the said interim dividend shall be May 15, 2024.
India’s largest IT company TCS had reported a 9.1 per cent rise in its March quarter net profit at Rs 12,434 crore.
Infosys profit also saw a 30 per cent upward trajectory to Rs 7,969 crore.
Wipro and Tech Mahindra, however, saw a decline in net profits by 7.8 per cent and 40.9 per cent, respectively.
HCLTech scrip closed at 2.08 per cent lower at Rs 1,472.30 apiece on the BSE on Friday.
