Like its peers TCS, Infosys and Wipro, the company has rolled out salary increases. These are effective October 1, for employees up to E3 level – junior to mid-level. Increments for senior staff are effective January 1. The quantum of increase is not clear. It has also rolled out promotions.
HCL’s revenue in the September quarter grew by 0.8% to $2.5 billion compared to the corresponding quarter last year. Sequentially, it grew 6.4%. In constant currency, revenue was down 0.4% compared to the year-ago period and grew 4.5% sequentially. The performance is better than that of TCS and Wipro, but not as good as Infosys’s.
“The intensity of tech spends has increased as companies recalibrate their businesses and business models for the new normal,” said C Vijayakumar, president and CEO of HCL Technologies. Clients, he said, are looking to strengthen their digital channels to reach their clients.
“Legacy systems are difficult to make changes to and clients are looking at application and infrastructure modernisation programmes. The latter is going in the direction of cloud migration. Many of our customers continue to give us new programmes which has helped us thrive in the new world,” he said.
The growth was led by life sciences & healthcare, retail & CPG (consumer packaged goods), and technology & services, registering a sequential growth of 8.6%, 8.4% and 6.3% respectively. “While the Q2 numbers validate that the worst is behind us, we remain watchful of the second wave of Covid, but are confident about our robust pipeline,” Vijayakumar said.
EBIT margin expanded 110 basis points sequentially to 21.6%.
The company expects its revenue to rise quarter-on-quarter by an average of 1.5% to 2.5% in constant currency for the next two quarters. Its revenue guidance remains unchanged. But it has revised the margin guidance to between 20% and 21%, from 19.5% and 20.5% for the fiscal.
HCL added 2,797 employees during the September quarter, taking the total headcount to over 1.5 lakh employees. IT services attrition was at 12.2%, down 470 basis points year-on-year.
HR head Apparao VV said the company has rolled out flexible HR policies, leave encashments and increased medical coverage so that employees don’t have to spend out of pocket. Globally, 96% of billed employees are working remotely with only 4% going to their workplace with enough safeguards put in place.
In the US, locals constitute 67.2% of the total employees. On the recent changes to H-1B visa regulations, the company said it would mean higher salaries when visas come for renewal. It said there would be a cost impact, but it would be limited during this fiscal. The board of directors has declared an interim dividend of Rs 4 for the current financial year.