HCL Tech Q3 Results: Profit rises 19% YoY to Rs 4,096 crore, beats estimates

HCL Technologies on Thursday reported 19% year-on-year (YoY) growth in consolidated net profit to Rs 4,096 crore. The revenue for the quarter grew nearly 20% on year to Rs 26,700 crore.

The bottomline was way above the ET Now poll of Rs 3,680 crore. Sequentially, the revenue rose a sharp 8% and the profit by more than 17%.

HCL Tech further reduced its constant currency revenue growth guidance for the current financial year to 13.5-14.0% from 13.5-14.5% earlier. The company also lowered its operating margin guidance to 18.0-18.5% from 18-19% earlier.


In constant currency terms, revenue in the December quarter rose 5% sequentially and 13.1% YoY. The services business revenue rose 2.2% sequentially and 15.4% YoY in constant currency terms.

India’s third largest software major won 17 large deals during the quarter, with new deal wins at $2.35 billion, up 10% YoY.

Operating margin, calculated as earnings before interest, tax (EBIT), further improved during the quarter. The profitability improved 165 basis points sequentially to 19.6%.

In absolute terms, the operating profit at Rs 5,228 crore was at an all-time high, the company said.

“We are confident to deliver industry leading growth over the medium-term supercharged by our positioning, our strong propositions and our passionate people.” C Vijayakumar, CEO and MD, said.

HCL Technologies saw some softness in the Americas during the quarter on a sequential basis, with constant currency growth coming in at just 0.5%. Europe grew 7.2% in constant currency terms sequentially in the last quarter.

In terms of verticals, financial services vertical saw a sequential decline in growth of 1.7% in constant currency terms, while manufacturing, telecom, and life sciences grew at a healthy 4.5-5.5%.

HCL Technologies added 3 clients in the $50 million basket, two in the $20 million basket, and 9 in the $5 million basket during the quarter.

The top 5 clients contributed more than 10% to the overall revenues in the third quarter.

The net employee addition in the December quarter slowed down significantly, as HCL Tech added 2̮,945 employees compared with 8,359 in the previous quarter.

The fresher additions were also less at 5,892 compared to 10,339 a quarter ago.

During the quarter, the attrition rate dipped further to 21.7% on a 12-month trailing basis, from 23.8% in the September quarter.