HCL Tech Q3 net profit falls 13%, declares interim dividend of ₹10

By Podishetti Akash
On Friday, HCL Tech scrip closed 0.32% lower at ₹1,330 on NSE.

IT services company HCL Technologies Ltd has reported 13% fall in consolidated net profit at 3,442 crore for the December quarter when compared with the same period last year. It was 3,969 crore in the same quarter (Q3FY21) of last year.

"The profit for Q3FY21 was higher by 438 crore due to reversal of a prior years’ tax provision due to change in the method of calculating a tax deduction, basis evaluation of judicial rulings. Excluding this, PAT for Q3FY22 is down 2.9% year-on-year," HCL Tech said in a filing.

On a sequential basis, the profit after tax (PAT) rose 5% from 3,259 crore in the previous September quarter.

The Noida-based company's revenue from operations, meanwhile, rose 15% to 22,331 crore as against 19,302 crore in the year-ago period.

The company's board has approved an interim dividend of 10 per equity share.

“We have delivered all round stellar performance this quarter with a revenue growth of 7.6% in constant currency QoQ, the highest recorded in the last 46 quarters," said HCL Tech CEO C Vijayakumar.

On Friday, HCL Tech scrip closed 0.32% lower at 1,330 on NSE. In the last one year, the shares have gained by 29.97% as against 24.95% rise in Nifty IT index.

In dollar terms, HCL Tech revenue was at $ 2,977 million, up 7% quarter-on-quarter and 14% year-on-year.

The revenue growth in constant currency (CC) during the third quarter was 15% year-on-year and 7.6% quarter-on-quarter, the highest in last 12 years.

The company's EBITDA (earnings before interest, tax, depreciation and amortisation) fell 3.7% year-on-year to 5,242 crore during the third quarter.

“This was clearly a quarter of record growth. Revenue achievement was at $2,977 million, up 7.6% QoQ and 15% YoY in constant currency. Profitability was maintained at EBITDA of 24.2% and EBIT of 19.1% (both Ind AS). Net Income Margin for the quarter was 15.4%," said HCL Tech CFO Prateek Aggarwal.

On the outlook, HCL Tech expects revenue to grow in double digits in constant currency for FY22, while EBIT margin is seen between 19% and 21% for the same period.

"We are in the disruption phase of our lives, and the world has been dramatically reshaped and transformed. Technology has become all pervasive, in our homes, and livelihoods, and is the epicenter of our lives. Our HCL family has been a catalyst in this change and is helping global enterprises embrace digital transformation, with a unique blend of products and services. As the global economy revives and we emerge from this crisis, we will continue to meet future challenges armed with our core beliefs of innovation and invention, driven by a strong faith in humanitarian values," said HCL Tech chairperson Roshni Nadar Malhotra.

HCL Tech has seen strong booking performance during the period under review with TCV (Total Contract Value) of new deal wins at $2,135 million, registering 64% growth over last year period.

HCL Tech's attrition (voluntary TTM) on a trailing 12 month basis during the quarter rose 19.8% from 15.7% in the previous quarter.

The company has also continued hiring at a brisk pace with net addition of 10,143 during the quarter, taking the total headcount now to 197,777.

Segment wise, services business has grown at 5% quarter-on-quarter (CC) this quarter on back of robust 5.2% quarter (CC) in Q2.

Engineering and R&D services grew at robust 8.3% quarter-on-quarter (20% year-on-year CC), driven by traction in digital engineering and IoT Works.

Meanwhile, IT and business services grew at healthy 15.3% year-on-year in constant currency terms, led by acceleration in cloud transformation and application modernization deals.

Gross Cash at the end of December quarter stood at $2,666 million and net cash at $2,140 million.


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