HCL Tech Q2 Results: Net profit rises 9.8% to ₹3,832 crore, revenue up 8% YoY; dividend declared

HCL Tech Q2 Results: HCL Technologies announced its July-September quarter results for fiscal 2023-24 (Q2FY24) on Thursday, October 12, reporting a rise of 9.8 per cent in its consolidated net profit at ₹3,832 crore, compared to ₹3,489 crore in the corresponding period last year. The growth in profit was supported by a robust deal momentum even as larger macroeconomic weakness persisted in the information technology (IT) sector.

The IT services company's revenue from operations in the second quarter of current fiscal stood at ₹26,672 crore, registering a growth of 8.04 per cent, compared to ₹24,686 crore in the year-ago period.

"Our revenue growth of 1 per cent QoQ and 3.4 per cent YoY on a constant currency basis, with a 154 bps QoQ improvement in operating margin and improving cashflows, reflect our ability to execute well in an evolving business environment and our commitment to operational efficiency,'' said C Vijaykumar, CEO and Managing Director, HCL Tech.

Also Read: HCL Tech Q2 FY24: IT giant declares interim dividend of Rs. 12 per share

Segment Performance

With regards to segment-wise performance, HCL Tech's IT and business services revenue stood at ₹19,898 crore in Q2FY24, up by 4.6 per cent year-on-year (YoY). While engineering and R&D services revenue saw a single-digit growth of 2 per cent YoY to ₹4,271 crore, and HCL Software revenue climbed by 3,6 per cent YoY.

EBIT margin of IT and business services stood at 18.1 per cent, and that of engineering and R&D services came in at 19.2 per cent in Q2FY24 versus 16.1 per cent and 16.8 per cent respectively in the preceding June quarter.

Dividend

The Noida-headquartered company declared an interim dividend of ₹12 per equity share of ₹2 each for fiscal 2023-24. ‘’The Record date of October 20, 2023 fixed for the payment of the aforesaid interim dividend has been confirmed by the Board of Directors. The payment date of the said interim dividend shall be October 31, 2023,'' said HCL Tech in a regulatory filing to the stock exchanges today.

FY24 Revenue Guidance

The country's third largest IT firm by market capitalisation has trimmed its FY24 revenue guidance to 4-5 per cent from 6-7 per cent in the preceding quarter and also reduced its services revenue guidance to 4.5 per cent - 5.5 per cent in constant currency (CC) terms. EBIT margin is expected to be between 18-19 per cent, according to its financial statement.

Also Read: Infosys Q2 Results: Net profit rises 3.17% to ₹6,212 crore, revenue up 7%; dividend declared

Deal Wins

HCL Tech's TCV new deal wins in the September quarter stands at US$3,936 million. The IT major won 16 large deals, with 10 in the services segment and six in software segment. Siemens AG selected HCL Tech to modernise its IT landscape worldwide and power cloud-led digital transformation.

‘’Our new bookings of US$4bn this quarter is at an all-time high, driven by a standout mega deal. This achievement underscores our ability to seize exceptional opportunities in the market and gives us optimism for our medium-term growth prospects,'' said C Vijaykumar, CMD.

Attrition

HCL Tech reported a further decline in its attrition rate to 14.2 per cent in Q2FY24 from 16.3 per cent in the preceding June quarter of current fiscal. The attrition rate excludes involuntary attrition and digital process operations.

The company's total headcount as of September 2023 was 2,21,139, down by 2,299 sequentially. The company's total headcount as of June 2023 was 2,23,438, down by 2,506 sequentially. During Q2FY24, HCL Tech hired 3,630 freshers which was a significant rise from 1,590 it hired in the June quarter. 

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"I am pleased to share that we continue to execute well in a challenging business environment. We are also expanding our global sustainability agenda with the launch of HOLTech Grant Americas to combat climate change,'' said Roshni Nadar, Chairperson, HCL Tech.

Ahead of the announcement of Q2FY24 results, shares of HCL Tech settled 1.74 per cent lower at ₹1,224.05 apiece on the BSE. HCL Tech Q2 results were announced shortly after IT peer Infosys declared its July-September quarter results. Infosys reported decent gains in terms of profit, however the IT giant trimmed its FY24 revenue guidance.