HCL Tech Q2 profit jumps to 19.2%, announces bonus share2 min read . Updated: 23 Oct 2019, 08:36 PM IST
- As of 30 September 2019, HCL said that it employed people from more than 140 nationalities spread across 44 countries
- The strong performance led the company to announce a issue of one bonus share for every share held by the shareholders
NEW DELHI : Noida-based HCL Technologies on Wednesday beat industry estimates by announcing a 19.4% quarter-on-quarter jump in net profit for the July-September quarter. The net profit stood at ₹2,651 crore as compared to ₹2,220 crore in the previous quarter.
In terms of revenue growth, the IT major posted a revenue growth of 6.0% quarter-on-quarter and 20.5% year-on-year (y-o-y) in constant currency terms, translating to more than 14% industry leading organic growth according to C. Vijayakumar, President & CEO, HCL Technologies.
"Our sharp focus on pricing and cost levers over the last 6 months have helped deliver a solid EBIT of 20%. I am also very excited about the progress we have made in our newly formed, HCL Software business. I am confident that this momentum combined with our diversified portfolio of services and software will deliver great value to our clients, our shareholders and most importantly, our employees." said C Vijayakumar, President & CEO, HCL Technologies, in a press statement.
The company said the 20.5% y-o-y growth was led by double digit growth across its three segments: IT and Business Services grew by 17.4%, products & platforms 57.9%, Engineering and R&D Services 15.0% (on y-o-y Constant Currency basis).
The robust growth in Engineering and R&D Services was driven by large deals and all round traction for engineering services in major industries that HCL operates in while leveraging investments in leading technologies like 5G and I4.0.
The company said that HCL Software, a new business unit of HCL Products & Platforms that became operational in Q2 helped enhance the revenue contribution from Financial Services 22.4% (up from 20.3% in Q1), Retail & CPG 10% (up from 9.5% in Q1) and Telecommunications, Media, Publishing & Entertainment 8.4% (up from 8.0% in Q1).
HCL also signed 15 transformational deals in Q2 led by IT and Business Services, in the key industry verticals of Financial Services, Life Sciences & Healthcare, Manufacturing, Retail and CPG.
In terms of future guidance, the management raised the revenue guidance to 15.0% to 17.0% in constant currency for financial year ending 2020 from 14-16%. The revenue guidance is based on FY’19 (April to March) average exchange rates. The above constant currency guidance translates to 13.2% to 15.2% in dollar terms based on September 30, 2019 rates.. It, however, maintained its margin guidance at 18.5-19.5% for the year.
According to analysts, HCL's numbers look a lot better than its peers because the company has integrated the IBM acquisition or intellectual property (IP) deals that it took over from the American giant. Stockbroking firm Prabhudas Lilladher said that HCLT’s margins in the next quarter will be aided by contribution from IBM products acquisition, which has higher margins.
HCLT has strong differentiated offerings in its Mode 2 business and reported that large digital engagements has increased. For instance, HCL has been selected by a Canadian bank for all key digital operations and a British multinational oil and gas major to provide for workplace management.
s. Women represent 26.17% of the global workforce.
“The overall robust performance validates the resilience of our business model as well as our evolving business mix. Cash EPS has increased by 12.9% on LTM YoY basis, and is now at `88.4 per share", said Prateek Aggarwal, CFO, HCL Technologies Ltd
The strong performance led the company to announce a issue of one bonus share for every share held by the shareholders of HCL Technologies.