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HCL Tech’s Net Profit Up 6.3% Consecutively, Company Raises Revenue Expectations for FY23

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  • HCL Tech’s revenue grew 5.2% sequentially to 24,686 crore, while net profit grew 6.2% to 3,489 crore.
  • The company raised its FY23 revenue forecast from 12-14% to 16-17%, but tempered its margin guidance.
  • Employee turnover remained stable at 23.8% in July-September, while the net number of employees exceeded 8,000.

Noida-based IT company HCL Technologies today reported a 6.2% increase in net profit in the second quarter to ₹3,489 crore, sequentially. Revenues also grew 3.8% sequentially to 24,686 crore.

Net margins improved marginally to 14.1%, from 14% in the last quarter, but are still down 170 basis points year-over-year.

Buoyed by good deal gains in the first half of the fiscal year, the IT company raised its revenue expectations – it now expects revenue growth of between 16-17% in constant currency for FY23, as opposed to its previous forecast of 12-14%.

However, it lowered the EBIT margin to 18-19%, as opposed to the previous forecast of 18-20%.

The turnover remained the same in the September quarter at 23.8%, as in the last quarter. Net employee additions for the quarter were 8,359.

Management indicated that demand for IT services remained strong with a push for digital transformation.

HCL Tech said it won 11 major deals during the quarter with a total contract value (new deal profits) of $2.38 billion and sequential growth of 16%, while revealing it has a “mega” deal in the quarter. brought in. However, it added that the impact of this deal will only be visible in FY24.

“Our services business grew 5.3% quarter on quarter and 18.9% year on year in constant currency, driven by strong demand for cloud, engineering and digital services. This is a validation of the strategic choices we have made and the effectiveness of our operational framework. Our bookings and pipeline remain very strong which bodes well for our future growth,” said C Vijayakumar CEO & MD at HCL Technologies.

Particularities Q2 FY23 Q1 FY23 Q2 FY22
Revenue ₹24,686 crore ₹23,464 crore ₹20,655 crore
Net profit ₹3,489 crore ₹3,283 crore ₹3,259 crore
Net margin 14.1% 14% 15.8%

Source: Company Reports

Roshni Nadar Malhotra, chairman of the company, said: “With our differentiated portfolio, we are well positioned to capitalize on the opportunities ahead in the digital-first world.”

Manufacturing was the only segment to grow double-digit in the second quarter of the fiscal year.

Segment QoQ change
Financial services 3.7%
production 10.9%
Technology and services 2.4%
Retail & CPG 3.0%
Telecommunications, Media, Publishing & Entertainment 4.1%
Life Sciences & Healthcare 5.1%
Public services 6.0%

HCL Tech’s board of directors also recommended an interim dividend of ₹10 per share, with October 20 as the record date.

ALSO SEE: Wipro Q2 net profit up 3.7% sequentially to ₹2,659, but not so optimistic about Q3
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