HCL Technologies Q1 net up 7.6% to Rs 3,534 cr

NEW DELHI: IT services firm HCL Technologies reported a 7.6 pc year-on-year rise in its June quarter net profit on the back of new order wins.

Its consolidated net profit at Rs 3,534 crore in April-June period was up from Rs 3,283 crore, in the same period a year back, according to a stock exchange filing. On a quarter-on-quarter basis, the net profit fell 11 per cent when compared to Rs 3,983 crore earnings in January-March period. The company’s revenue at Rs 26,296 cr was down 1.2 per cent quarter-on-quarter but up 12.1 per cent year-on-year. On a constant currency, revenue was down 1.3 per cent quarter-on-quarter but up 6.3 per cent year-on-year.

HCL said it won 18 large deals, 7 in services and 11 in software, during the June quarter. The firm projected a revenue growth of 6-8 pc in constant currency terms and an EBIT (Earnings Before Interest and Taxes) margin of 18-19 per cent.

The company’s board of directors have declared an interim dividend of Rs 10 per equity share of Rs 2 each of the company for the financial year 2023-24.

The company’s CEO C Vijayakumar said the order pipeline continues to grow even as he added that the current quarter was a soft one. “Though we did expect this to be a soft quarter our performance was lower than our own expectations,” he said during the June quarter earnings conference.

He said that the bookings this quarter were at $1.6 billion as against over $2 billion for the last seven quarters. EBITDA margins for the quarter stood at 16.9 per cent compared to 18.25 per cent in the previous quarter.

Vijayakumar said the company is optimistic about pipeline conversion and its translation into revenue that will help meet the full-year guidance.

While acknowledging that there is softness in verticals such as tech and telecom driven by reduction in discretionary spends and associated ramp downs, Vijayakumar said he expected them to pick up shortly.

HCL Technologies has signed a definitive agreement to acquire 100 per cent stake in ASAP Group, a German automotive engineering services provider, for 251.1 million euros (about Rs 2,300 crore), according to a BSE filing. The acquisition is likely to be completed by September 2023 through an all-cash deal via the company’s UK subsidiary, subject to regulatory approvals, the filing said.

HCLTech aims to expand its capabilities in the automotive engineering services segment, particularly in e-mobility, autonomous driving and connectivity in Europe, Germany and other global markets, it stated.