NEW DELHI: Covid-19 had minimal impact on HCL Technologies's business during the March quarter and it expects to "emerge rich from this crisis.
"We are confident that our deep-rooted client relationships and strong balance sheet will see us through this pandemic phase. We have four years of industry leading growth, new services and IP-led growth are paying rich dividends so we will emerge rich from this crisis, " said C. Vijayakumar, President & CEO, HCL Technologies.
The tech and software major's March quarter results on Thursday beat estimates as it reported a net profit of ₹3,154 crore, up 3.8% quarter-on-quarter and 22.8% year-on-year.
The Noida-based IT company posted a revenue growth of 16.7% y-o-y in constant currency terms, delivering a strong 19.6% EBIT (earnings before interest and taxes) annually. The revenue growth was within the guided range of 16.5% to 17% y-o-y, while sequential revenue growth of 0.8% in constant currency for Q4 was also industry leading, the company said.
“FY20 has been a landmark year, where we witnessed our highest growth in recent years ... The disruption due to the coronavirus has been minimal as the company was quick to respond to the pandemic by putting in place business continuity measures that were executed meticulously, leading to stable operations," said Vijayakumar.
HCL Tech’s revenue increase in constant currency was led by organic growth and acceleration of its Mode 2 (digital and new technologies) and Mode 3 (products and platforms) revenue.
“We delivered strong double-digit growth across all segments, geographies and verticals, Mode 2 and Mode 3 revenues for the year now make up 33% of total revenues, increasing from 28.4% in fiscal 2019, resulting in a combined growth of 34.7% YoY in constant currency," Vijayakumar added.
The company said the strong performance was also due to double-digit growth across three segments -- IT and business services, which grew at 12.7%, ers (12.8%) and products and platforms (60.5%) in constant currency.
HCL Software continued its operational momentum in Q4, completing over 5,500 sales transactions for the quarter and on-boarding more than 2,000 partners for the fiscal. The division continues to invest in products and has announced several product releases.
HCL also signed 14 "transformational" deals in Q4, led by key industry verticals -- hi-tech, manufacturing and financial services. In all, HCL signed 53 significant deals in FY20.
The company also said its cash generation in Q4 was strong with operating cash flow at $1,743 million and free cash flow at $1,480 million. Net cash is now at $1,359 million, said Prateek Aggarwal, CFO, HCL Technologies Ltd.
HCL activated its covid-19 business continuity plan at the end of January and now has 96% of its employees working from home and another 2.5% of its employees working from HCL offices or client locations.
Vijayakumar reiterated that HCL was committed to its employees and there would be no covid-related redundancies. He said the return to office will be calibrated and they see only 10% of employees coming to offices by end of this quarter.
While the WFH model has been productive for the company, it would need to re-evaluate the model and see how it would work out in the normal situation, alluding to privacy and security aspects. For the next 12-18 months, HCL said 50% of its employees will work from home and 50% from offices on a rotation basis.
HCL continued with its hiring of local workforce in all regions across the globe. As of 31 March, HCL’s localization in the US stood at 67.7%.