HCL Technologies Q1 FY 2025 Quarterly Summary

HCL Technologies Ltd. (HCLTech) has reported its financial results for the first quarter of fiscal year 2025 (Q1 FY25). Despite facing some headwinds in a dynamic IT market, the company delivered a robust performance across several key areas.

Financial Performance Overview

• Revenue: The company posted a revenue of ₹28,057 crores, a slight decrease of 1.6% from the previous quarter. However, year-over-year (YoY), revenue increased by 6.7%. When viewed in constant currency terms, the YoY revenue growth was 5.6%.
• Net Profit: HCLTech achieved a net profit of ₹4,259 crores, which is a significant 20.5% increase from ₹3,534 crores in Q1 FY24. This growth surpassed market expectations, largely driven by strategic divestitures, including the sale of its stake in a joint venture with State Street International Holdings for around ₹1,438 crores.
• EBIT (Earnings Before Interest and Taxes): EBIT was reported at ₹4,795 crores, a 4.6% decline from the previous quarter but a 7.5% increase YoY. The EBIT margin saw a slight contraction to 17.1%, down from 17.6% in the previous quarter.

Key Highlights

• New Business Bookings: HCLTech secured $2 billion in Total Contract Value (TCV) for new business bookings, reflecting strong demand, particularly in emerging technologies such as Generative AI.
• Headcount Changes: The total workforce decreased by 8,080, mainly due to divestitures, while 1,078 fresh graduates were added. The company’s attrition rate improved to 12.8%, a significant reduction from 16.3% in the same quarter last year.
• Dividend Announcement: The Board of Directors declared a dividend of ₹12 per share, marking the 86th consecutive quarter of dividend payouts.

Market Outlook and Guidance

• Revenue Growth: HCLTech has maintained its revenue growth forecast for FY25, projecting an increase of 3% to 5% in constant currency terms.
• EBIT Margin: The EBIT margin is expected to remain between 18% and 19% for the fiscal year.
• CEO’s Remarks: CEO C. Vijayakumar expressed confidence in HCLTech's growth prospects, highlighting client investments in digital transformation and AI technologies as key drivers for future expansion.

Sustainability and Recognition

• Sustainability: HCLTech was ranked #3 in Brand Finance’s Sustainability Perception Index in India.
• Awards: The company received the SAP Pinnacle Award in the Social Impact category for its AquaSphere initiative, which focuses on water conservation.

Conclusion

HCL Technologies' Q1 FY25 results demonstrate resilience in a challenging environment. The company's strategic initiatives, particularly in innovation and client engagement within emerging tech sectors, position it well for sustained growth in the coming quarters.

Source: