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HCL Tech Q3 Results: Net profit rises 5.5% to ₹4,591 crore, dividend declared; 5 key highlights
- HCL Tech Q3 Results: India's third-largest IT service major's revenue from operations in the third quarter of FY25 rose five per cent to ₹29,890 crore, compared to ₹28,446 crore in the year-ago period.
HCL Tech Q3 Results: HCL Technologies announced its October-December quarter results for fiscal 2024-25 (Q3FY25) on Monday, January 13, reporting a rise of 5.5 per cent in its consolidated net profit to ₹4,591 crore, compared to ₹4,350 crore in the corresponding period last year. India's third-largest IT service major's revenue from operations in the third quarter of FY25 rose five per cent to ₹29,890 crore, compared to ₹28,446 crore in the year-ago period.
"HCL Tech delivers another quarter of solid growth at 3.8 per cent QoQ in constant currency and EBIT at 19.5 per cent. I am pleased that this growth is powered by broad-based performance across business lines as our clients across verticals and geos reaffirm their confidence in our digital and AI offerings," said C Vijayakumar, CEO and Managing Director, HCL Tech.
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Here are 5 key highlights of HCL Tech's Q3 scorecard:
1.P&L Account: Profit, Income, Revenue
Sequentially, HCL Tec's net profit and revenue rose 8.4 and 3.5 per cent, respectively. The IT major raised the lower end of its growth guidance in constant currency terms by 100 bps to 4.5-5 per cent, from 3.5-5 per cent earlier. It has retained EBIT margin guidance at 18-19 per cent for the full year. Services revenue growth is expected to be between 4.5-5 per cent YoY
On the operational front, the Noida-headquartered IT giant's earnings before interest, taxes, depreciation, and amortization (EBITDA) in the October-December quarter rose four per cent to ₹5,821 crore. In constant currency (CC) terms, revenue growth for the quarter stood at four per cent YoY. USD revenues during the third quarter rose 3.5 per cent YoY to $3.53 billion.
"HCL Tech is well positioned as AI-led transformation brings new growth opportunities. We continue to deliver industry-leading performance with governance and sustainability at the core," said Roshni Nadar, Chairperson, HCL Tech.
2.Dividend
The IT major's board declared its fourth interim dividend of Rs. 18 per equity share of Rs. 2 each of the company for FY25. This includes a special dividend of Rs. 6 per share to celebrate 25 years of the IT major's public listing. This represents 88th consecutive quarter of dividend pay-out.
“The record date for the payment of the interim dividend shall be January 17, and the payment date of the said interim dividend shall be January 24, 2025,” said HCL Tech in a regulatory filing to the stock exchanges today. In the past 12 months, HCL Tech has declared dividends amounting to ₹54.00 per share.
3.Headcount, Attrition
HCL Tech reported a marginal increase in attrition rate to 13.2 per cent for the December quarter. The attrition figure stood at 12.8 per cent in the year-ago period and 12.9 per cent in the preceding quarter of FY25. HCL Tech added 2,134 employees during the quarter, bringing the total headcount to 2,20,755.
It also added 2,014 freshers in the December quarter, down from 3,818 freshers hired in the December 2023 quarter. The attrition rate measures the rate at which employees leave a company over a period of time. A lower rate is generally considered healthy for a company. An additional 1,000 staffers will be added during the March quarter at HCL Tech.
4.Vertical metrics
HCL Tech's IT and business segment contributed the highest revenue share, at 71.8 per cent, followed by engineering and R&D services. HCLSoftware's business grew 18.7 per cent sequentially in CC terms but declined 2.1 per cent yearly. The telecom, media, publishing and entertainment vertical grew 33.1 per cent YoY, while the retail vertical grew 17.2 per cent YoY.
The technology and services vertical grew 7.6 per cent YoY. Segment-wise, HCL Tech's services revenue in CC terms rose by five per cent YoY. Digital revenues rose by six per cent YoY, which contributes 38.5 per cent of services.
“Our razor-sharp focus on achieving topline growth with healthy margins is reflected in our highest-ever EBIT of ₹5,821 crore and net profit this quarter. LTM Return on Invested Capital continues its growth trajectory and stands at 36.6 per cent (up 385 bps YoY) and 44.7 per cent for services (up 455 bps YoY),” said Shiv Walia, Chief Financial Officer (CFO), HCL Tech.
"Cash conversion (on an LTM basis) continues to outpace our five-year FCF/NI average of 126 per cent, with FCF/NI of 134 per cent this quarter. This has strengthened our balance sheet, helping us end the quarter with our highest-ever cash balance of ₹27,707 crore," added Walia.
5.Deal Wins
The new deal wins stood at $2.1 billion during the December quarter, including seven deals from services and five from HCLSoftware, compared with $2.22 billion in the previous quarter and $1.93 billion in the year-ago period. HCL Tech completed the acquisition of certain IP assets from US-based tech major HP Enterprise last month.
“Our new deal bookings were healthy during the quarter at $2.1 billion with wins across services and software. We are positioning ourselves for a transformative future, with AI empowering businesses and employees. We continue to see growing demand for our AI-led propositions across services and software offerings,” said CEO Vijaykumar. The total contract value (TCV) for the quarter stood at $2,095 million.
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Business NewsCompaniesCompany ResultsHCL Tech Q3 Results: Net profit rises 5.5% to ₹4,591 crore, dividend declared; 5 key highlights
First Published:13 Jan 2025, 05:51 PM IST
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