HCL Tech to roll out salary hikes for employees across bands

NEW DELHI: HCL Technologies Ltd will roll out salary hikes for its employees, the Noida-based IT company said on Friday. Employees in the E0-E3 band will get hikes, effective October, while increases for E3 and above will be come into effect January 2021, C Vijayakumar, president and CEO, said while announcing the company’s second quarter (July-September) earnings. 

“The solid growth in Q2 has given us the confidence for the full year..the increments will be the same as in FY 20,” he said.  

Earlier this week, Tata Consultancy Services (TCS), Infosys, and Wipro also announced salary hikes for their employees, a sign that India’s top-tier information technology (IT) companies saw signs of uptick in demand for their core software services and digital technology offerings during the September quarter. 

HCL Technologies reported a net profit of ₹3,142 crore for the September quarter, up 7.4% sequentially and 18.5% year-on-year.

Revenue grew 4.2% QoQ to ₹18,59 crore and from Rs17,528 crore in the corresponding quarter last year, with a sequential revenue growth of 4.5% in constant currency terms and 21.6% EBIT (earnings before interest and tax) margin.

This is at a 22-quarter high, said Vijayakumar, adding "this growth momentum was driven by our continued leadership in digital transformation and Cloud businesses and a strong stability in the Products & Platforms segment, all of which continue to open diverse growth avenues for us.” 

During the period under review, HCL signed 15 deals, led by key industry verticals including life sciences and healthcare, public services (energy & utilities) and manufacturing. There was a broad-based performance in Q2 with all growth engines firing and all geographies and verticals returning to smart positive sequential growth, the company said. 

"While the Q2 numbers validate that the worst is behind us, we remain watchful of the 2nd wave of covid, but are confident about our robust pipeline," the CEO said, adding that this accounts for the improved guidance for Q3 and Q4.

The company expects revenue to grow QoQ by an average of 1.5-2.5% in constant currency terms and FY21 EBIT to be between 20.0% and 21.0%.

Vijayakumar said new wins and deals showed robust growth and were possible because of the company’s digital transformation initiatives, the stickiness and confidence of clients, continuous focus on automation and offshoring and the execution by employees. 

HCL’s Mode 1-2-3 strategy has become the company's growth blueprint to navigate swiftly in the digital age. Mode 1 saw 4.3% growth spearheaded by the infrastructure business, Mode 2 grew by 6.9% while Mode 3 grew by 2%. 

"Our investments over the last few years in next-gen technologies have held us in good stead during these difficult times and position us strongly to leverage the emerging market opportunities," said Vijayakumar. 

In terms of hiring, 1,578 freshers were on-boarded last quarter. “We will be significantly enhancing this in over the next two quarters. We have unable to recruit because lot of colleges have not finished exams,” said VV Apparao, Chief Human Resources Officer, HCL Technologies, adding that the company aims to hire 12,000 freshers by the end of this fiscal.

Because of the pandemic, 96% of employees have continued to work from home with 4% coming to offices.

The US localisation stands at 67.2%, said to be the highest amongst IT companies. On the impact of H1B visa rule changes, the company said that the new regulation requires the wages to be increased when visas come for renewal so it will have an impact on cost, but the impact would be limited to FY21.

 As of September end, HCL’s full-time headcount stood at 153,085, while attrition for IT services was at 12.2 per cent (LTM basis). 

Last month, HCL Technologies Ltd replaced ITC Ltd, India's largest cigarette maker, to become India’s 10th most valued firm by market capitalisation on the BSE.