HCL Tech Q1 Results - FY 22-2023

HCL Technologies, one of the top IT players in India, declared its financial results after market hours on 12th July 2022.

The tech giant reported consolidated revenue from operations for Q1 FY23 at Rs. 23,464 crore, showing a 16.92% YoY (year on year) growth and a 3.84% QoQ (quarter on quarter) growth. The revenue growth (in constant currency terms) is a 15.6% YoY increase and a 2.7% QoQ increase over previous terms.  

The Profit After Tax (PAT) for the quarter came in at Rs. 3281 crore, showing a 2.12% YoY increase. However, on a quarterly basis, the PAT seems to have declined by 8.84% against Q4 FY22. This can be partially attributed to the tax expense the company had to endure during the quarter of Rs 1,056 crore, against Rs 721 crore in the previous quarter. 

More on HCL 1QFY23

The EBITDA for HCL in Q1 FY23 was at Rs. 4975 crore, a decline of 1.7% YoY and 1.5% QoQ.

With a strong booking performance in the quarter, HCL Technologies declared new deal wins with a total contract value of $2,054 million, registering a growth of 23.4% YoY. Of this, there were 7 net new deals in the services sector and 9 net new deals in the products sector.

Looking at the sector-wise performance during the first quarter of this financial year, the growth momentum was led by the technology and services sector, followed by the telecom, media, publishing, and entertainment sector.

The attrition rate, which has always been a pain point for the industry, continued to plague HCL Technologies, increasing to 23.8% from 21.9% reported in the same quarter of last year. 

The company declared a dividend of Rs. 10 per share. The basic earnings per share stood at Rs. 12.13 for the quarter.

Guidance for the year:

The management has provided guidance on revenue, which is expected to grow 12-14% in constant currency terms in FY23. And EBIT margin is expected to be between 18% and 20% in FY23. 

Hits

• Consolidated revenue from IT And business Services grew by 18.1% YoY
• Revenue from Engineering and R&D services grew by 23% YoY
• Revenue from Products and Platforms reported a 6.5% YoY
• Total Revenue increased by 15.6% YoY

Misses 

• HCL Tech’s EBITDA was down 6.7% y-o-y to $642 million in the recent quarter of FY23. 
• The attrition in the last twelve months stood at 23.8% in June 2022 up from 11.8% in the same period last year. The attrition rate was 21.9% in the previous quarter (March quarter).

Segment-wise revenue 

• IT and business services: A YoY increase of 18.86% 
• Engineering and R&D services: A YoY increase of 26.92% 
• Products and platforms: A YoY decrease of 4.85% 

Other things to know

• The total headcount of the HCL Technologies team was reported at 210,966, up 19.5% YoY. Of its global employees, 28.30% are women.
• 16 new deal wins across diverse verticals were announced, with a total contract value of $2,054 million, registering a growth of 23.4% YoY.
• During the quarter, the employees participated in approximately two million hours of learning and development and capability training. 

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Research Analyst: Bavadharini KS