HCL Technologies reported 1.7% rise in consolidated net profit to Rs 3,259 crore on a 2.9% increase in revenue from operations to Rs 20,655 crore in Q2 FY22 over Q1 FY22.
On the segmental front, IT and Business Services revenue was Rs 15,005 crore (up 4.4% QoQ), Engineering and R&D Services revenue was Rs 3,242 crore (up 5.4% QoQ) and revenue from Products & Platforms (P&P) was Rs 2,413 crore (down 8.1% QoQ) in the second quarter.
EBITDA, however, declined by 1.4% to Rs 4,838 crore in Q2 FY22 over Q1 FY22. EBITDA margin was 23.4% as on 30 September 2021.
As compared with Q2 FY21, the company's net profit and revenues are higher by 3.7% and 11.1%, respectively.
In dollar terms, IT firm's net profit and revenue rose by 1.2% QoQ and 2.6% QoQ during the period under review. In constant currency terms, the Noida-based company's revenues grew by 3.5% quarter-on-quarter (QoQ).
HCL Tech's Q2 TCV (total contract value) of new deal wins was $2,245 million registering 38% YoY growth, enabled by 14 net new large deal wins. Hiring continued at a brisk pace with net addition of 11,135 during the quarter being the highest in the last 24 quarters. Total headcount was at 187,634.
The attrition level has risen slightly to 12.2% from 11.8% in the previous June quarter.
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On the outlook, the company said it expects revenue to grow in double digits in constant currency for FY22. EBIT margin expected to be between 19.0% and 21.0% for FY'22, it added.
The board has also declared an interim dividend of Rs 10 per equity share for the financial year 2021-22.
Roshni Nadar Malhotra, Chairperson, HCL Technologies, said: The pandemic accelerated the need for building together a sustainable and scalable future and investing in purpose-driven growth. The lessons learned have sharpened our ability to adapt and to innovate and deepened our commitment to bringing positive change through technology. In the months ahead, we will further accelerate our actions and investments in emerging technologies, people and ESG to build a stronger and better future together.
"Services Revenue (ITBS & ERS) grew strongly at 5.2% QoQ in constant currency, with stable EBIT. P&P growth was impacted due to delays in closure of certain deals. Client mining has been healthy across all categories, notably, the number of $50 million clients now stand at 41 (up 12 YoY).
Strong cash generation and conversion continued this quarter. Gross cash stands at robust $2,696 million (as on 30 September 2021). The board approved a payout policy that entails investor payouts of not less than 75% of net income cumulatively over 5 years FY22 to FY26., said Prateek Aggarwal, chief financial officer, HCL Technologies.
Separately, HCL Technologies said that its board has approved a change to its existing long-term incentive (LTI) program to include RSU (restricted stock unit) grants as part of the compensation mix. The company will move from 100 % cash awards to a mix of 70% cash, 30% RSUs for the grants it will offer later this calendar year.
Subject to shareholder approval, the plan proposes to allocate 11.1 million shares (equal to less than 0.50% of the company's equity shares) to almost 3,000 senior leaders. The plans will be offered as tenure-based vesting by FY2025, and the company also has proposed an option to substitute this part of the plan with RSUs that vest based on achievement of long-term performance targets.
C Vijayakumar, HCL Technologies CEO and Managing Director, said: We continue to see strong growth momentum in the business, and we are happy to extend long term wealth creation opportunities in the form of RSUs for a greater number of senior leaders.
HCL Tech is a leading global IT services company and ranked among the top four Indian IT services companies in terms of revenues. The company has focused on 'transformational outsourcing', and offers integrated portfolio of services, including software-led IT solutions, remote infrastructure management, engineering and R&D services, and BPO services. It leverages its extensive global offshore infrastructure and network of offices in 50 countries to provide multi-service delivery in key industry verticals, including manufacturing, financial services, media, telecommunication, healthcare, technology and public services, among others.
Shares of HCL Technologies declined 1.17% to end at Rs 1250.90 on BSE on Thursday.
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