HCL Tech reports 12.7% rise in profit; revenue grows 4.5% sequentially

HCL Technologies reported a 12.7% rise in net profit at $424 million in the September quarter compared to the same period last year. Sequentially, the income was up 9.7%. The growth in revenues was flat at 0.8% on year-on-year (YoY) basis and rose by 6.4% sequentially to $2.5 billion.

The company, which is the third largest software services firm has maintained its revenue growth outlook of 1.5% to 2.5% in constant currency for the third and the fourth quarter of FY’21. It has, however, increased its EBIT margin to be between 20.0% and 21.0% for FY’21 now.

“We have delivered a stellar Q2 performance with a sequential revenue growth of 4.5% in constant currency and 21.6% EBIT margin. This growth momentum was driven by our continued leadership in Digital Transformation and Cloud businesses and a strong stability in the Products & Platforms segment, all of which continue to open diverse growth avenues for us. Our investments over the last few years in next-gen technologies have held us in good stead during these difficult times and position us strongly to leverage the emerging market opportunities,” said C Vijayakumar, President & CEO, HCL Technologies Ltd.

Most of the top IT companies have reported better than expected results this qaurter. Infosys forecasted an expansion in revenue for this financial year. The IT giant said revenue for FY21 will increase by 2-3%, as against the 0-2% growth rate projected earlier. Profit rose by 20.5% to Rs 4,845 crore in the September quarter from the year-ago quarter, beating analysts’ estimates. Revenue grew 8.6% to Rs 24,570 crore. It declared an interim dividend of Rs 12 per equity share.

While Infosys’s revenue in dollars, devoid of foreign exchange fluctuations, grew sequentially by 4% to $3.31 billion, it was slower than the 4.8% growth posted by larger rival Tata Consultancy Services. Wipro grew at 2% over the previous quarter.

HCL also said that its pipeline is at an all time high and it will rolll out salary hikes later this year.

“We are delighted with the all-round Q2 FY’21 performance. All engines of growth are firing, and our margins have increased significantly with EBITDA at 26.6% and EBIT at 21.6%, expanding by 320 bps and 160 bps respectively on YoY basis. The standout performance for the quarter has been the cash generation and conversion ratios. Our Operating Cash Flow (OCF) & Free Cash Flow (FCF) stand at handsome US$ 2,692 million and US$ 2,444 million respectively on Last-Twelve-Month basis,” said Prateek Aggarwal, CFO, HCL Technologies Ltd.

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