HCL Tech Q1 net profit up 9.9% to Rs 3,214 cr; company confident in double-digit revenue growth in FY22
IT services company HCL Technologies posted a 9.9% increase in consolidated net profit to Rs 3,214 crore for the June 2021 quarter on Monday, and breathed confidence in recording two-fold growth. constant currency figures in fiscal year 22 thanks to a strong pipeline of transactions.
Additionally, Shiv Nadar, a pioneer in India’s IT industry, stepped down as CEO and board member of the company, a year after handing over the reins of the IT major to his daughter, Roshni Nadar Malhotra.
C Vijayakumar, President and CEO of the company will assume the role of Managing Director with the title of CEO and Managing Director for a five-year term effective July 20.
The Noida-headquartered company reported net profit of Rs 2,925 crore in the April to June 2020 quarter (under US GAAP). Its revenue rose 12.5% ââto Rs 20,068 crore in the quarter under review, compared to Rs 17,841 crore in the previous year period.
âWe recorded 11.7% year-over-year revenue growth in constant currency and 29% year-on-year growth in Mode 2 services in constant currency, notably through cloud agreements. and digital transformation.
âReservations and the pipeline remain healthy, and with the pipeline expanding to new levels across all levels, we continue to see a convergence of integrated application and infrastructure opportunities,â said C Vijayakumar, president and CEO of HCL Technologies, during a virtual briefing.
This is a good sign for the future as it makes HCL Tech’s growth broader and helps accelerate growth across all service lines, he added.
Vijayakumar said the company is confident in good quarter-over-quarter growth for the remainder of the year, driven by 37% year-on-year growth in bookings and over 7,500 net hires this quarter. .
The company’s first quarter TCV (total contract value) of new contracts won was $ 1,664 million, up 37% year-on-year. In constant currency terms, HCL Tech’s revenue in the June 2021 quarter increased 11.7% year-on-year.
Constant currency revenue is expected to grow by double digits, while the EBIT margin (earnings before interest and taxes) is expected to be between 19% and 21% for fiscal 22.
In dollar terms, HCL Technologies’ net profit increased 12.8% to $ 43 million in the June 2021 quarter, while revenue increased 15.5% to 2,719.6 millions of dollars during the current quarter compared to the period of the previous year.
HCL Technologies announced its figures after the close of market hours. HCL Technologies shares closed at Rs1,000.20 each, slightly lower from the previous BSE close.
Sanjeev Hota, Head (Research) at Sharekhan by BNP Paribas, said HCL Tech reported lower than expected revenue growth and operating profitability, while net profit remained in line with expectations thanks to weaker tax provisions .
Bigger rivals Tata Consultancy Services (TCS) and Infosys also saw strong growth in the June quarter thanks to strong demand from customers looking to take advantage of digital technologies in the post-pandemic world.
TCS had recorded an 18.5% growth in its consolidated revenue to Rs 45,411 crore during the June 2021 quarter, while Infosys saw its revenue increase by 17.8% to Rs 27,896 crore. Infosys raised its full-year revenue growth outlook to 14-16% (from 12-14% previously), supported by a strong pipeline of deals and a “strong” performance in the first quarter.
Wipro’s IT services revenue grew 12.2% sequentially to $ 2,414.5 million (25.7% year-on-year), and the company provided a strong revenue growth outlook for Wipro. 5-7% sequential increase in the September quarter.
At the end of the June 2021 quarter, HCL had 1,769,499 employees with a net addition of 7,522 people. Its attrition rate for information technology (IT) services (based on the past 12 months) was 11.8%.
During the briefing, HCL Technologies’ Director of Human Resources (CHRO) Apparao VV said that last year the company integrated 14,600 freshers globally.
âThis year we are targeting between 20,000 and 22,000 freshers and I won’t be surprised if we exceed that number … in the second quarter we are aiming (to get on board) 6,000 (freshers),â Apparao said.
He added that the company, which gave pay raises in October last year, will offer pay raises starting July 1 as it resumes its regular cycle.
Apparao said HCL also plans to vaccinate 100% of its employees during the current quarter. Currently, around 74 percent of its employees have been vaccinated.
Asked about the return of employees to the office, Apparao said that currently around three percent of employees in India come to the workplace, while others continue to work from home.
âWe will take (a call) as we goâ¦ based on customer needs,â he added.
The board of directors declared an interim dividend of Rs 6 per share for the fiscal year 2021-2022. The registration date of July 28, 2021 has been set for the payment of the interim dividend.
Also Read: Shiv Nadar Leaves HCL Tech MD, C Vijayakumar Takes Over
Read also: TCS, Infosys, Wipro, HCL, Tech Mahindra, Cognizant to cut 3 million jobs by 2022: report
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