HCL Tech Q1 net rises 2.4% to ₹3,283 cr.

Board approves dividend of ₹10 per share

HCL Technologies on Tuesday reported a 2.4% growth in net profit to ₹3,283 crore for the first quarter ended June, while maintaining revenue guidance of 12% to 14% growth in constant currency terms on the back of strong order pipeline.

The company, which posted a net income of ₹3,205 crore in April-June 2021 quarter, posted an almost 17% year-on-year growth in revenue to ₹23,464 crore.

“We’ve started FY23 on a strong note with a healthy performance in Q1,” C. Vijayakumar, CEO and MD, said. “Our revenue growth this quarter came in at 2.7% sequentially and 15.6% year-on-year in constant currency.”

The company’s services business continued to deliver increasing growth trajectory, growing at 19% year-on-year, and 2.3% sequentially in constant currency, driven by digital engineering and digital application services with cloud adoption being a horizontal theme across all services and verticals, he said, adding that HCL technologies also saw strong recovery in its products and platform business, which grew 5.6% sequentially and 1.4% year- on-year in constant currency.

“When it comes to margins, we posted an EBIT performance of 17% this quarter. Margins in the services business is under pressure, mainly due to increased talent costs and transaction costs. We have undertaken appropriate actions to improve our profitability profile. The results of which would start reflecting in the coming quarters,” he said. Mr. Vijayakumar added that the margin-improvement initiatives include both revenue and cost levers led by innovative pricing, rate increases and optimization of the operating costs, both people and non people costs.

On bookings and pipeline, he said new bookings grew 23.4% YoY supported by a good mix of large and mid sized deals and the pipeline remains near record high.

“Even though there are concerns about slowdown, our pipeline continues to be at an all time high…We continue to see strong momentum in the market. We remain very positive about our growth trajectory moving forward,” he said.