HCLTech Q2 results: Net profit rises 10.5% to Rs 4,235 cr, revenue up 8.2% | Company Results
C Vijayakumar, MD & CEO, HCLTech
India’s third-largest IT services firm HCLTech upped the lower end of its FY25 revenue growth guidance to the range of 3.5 per cent to 5 per cent. Earlier, the firm had provided a revenue guidance of 3-5 per cent.
The Noida-headquartered IT services major HCLTech’s net profit for the first quarter of FY25 came in at Rs 4,235 crore. Profits were up 10.5 per cent year on year but were flat sequentially.
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Revenue for the quarter stood at Rs 28,862 crore, up 8.2 per cent YoY and grew 2.9 per cent sequentially.
HCLTech’s Q2 performance exceeded Bloomberg estimates, which had projected revenue at Rs 28,637 crore and net profit at Rs 4,061.6 crore.
The total contract value (TCV) for the first quarter came in at $2.2 billion. TCV on a sequential basis was up from $1.96 billion in Q1 FY25.
“We delivered a strong quarter with revenue growing 1.6 per cent QoQ in constant currency and EBIT coming in at 18.6 per cent. This growth was well distributed across verticals, geographies, and offerings. HCL Software has delivered a stellar performance of 9.4 per cent YoY this quarter and 6.4 per cent growth in H1 FY25 in constant currency, demonstrating the increasing relevance of our products for the digital economy. Our pipeline is very strong, including Data & AI, Digital Engineering, SAP migration, and efficiency-led programs. Our GenAI offerings like AI Force and AI Foundry are resonating very well with our clients and should be drivers of efficiency, growth, and innovation over the medium term,” said C Vijayakumar, CEO and MD, HCLTech.
The company continued to grow its business in North America and Europe. North America grew by 7.5 per cent YoY, and Europe was up by 4.2 per cent.
The growth driver for the quarter was Telecommunications, Media, Publishing, and Entertainment, which grew by 61.2 per cent YoY, followed by manufacturing (7.1 per cent), retail and consumer packaged goods (6.2 per cent), and technology and services (5.6 per cent). BFSI was down 4.5 per cent.
“The revenue growth has come with improved profitability. Our EBIT margins in Q2 rose to 18.6 per cent, up 149 bps sequentially. LTM Return on Invested Capital (ROIC) stands at a solid 35.7 per cent at the company level and 43.5 per cent at Services, an expansion of 353 bps YoY and 403 bps YoY respectively. Our dedicated efforts to improve our cash conversion continue to yield best-in-class results, with LTM FCF/NI coming in at 119 per cent,” said Shiv Walia, CFO, HCLTech.
The company, however, saw its total headcount decrease by 780. This has come down from the 8,080 in Q1 FY25. Attrition for the quarter was at 12.9 per cent. The company had a fresher addition of 2,932 in this quarter.
First Published: Oct 14 2024 | 6:13 PM IST
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