HCL Technologies (HCLTech) has reported robust financial results for the first quarter, showcasing strong growth driven by its services business and recent deals in the financial services sector.

Financial Highlights

HCLTech's consolidated revenue for Q1 reached ₹30,349.00 crores, marking an 8.2% year-over-year increase. In constant currency terms, the company's revenue grew by 3.7% compared to the same quarter last year. The services business, which includes IT and Business Services and Engineering and R&D services, demonstrated particularly strong performance with a 4.5% year-over-year growth in constant currency.

Profitability and Margins

While revenue growth was impressive, the company's profitability metrics showed some pressure:

• EBIT (Earnings Before Interest and Taxes) stood at ₹4,942.00 crores, representing 16.3% of revenue. This marks a 9.2% decrease quarter-over-quarter but a 3.1% increase year-over-year.
• Net Income reached ₹3,843.00 crores, accounting for 12.7% of revenue. This reflects a 10.8% decline quarter-over-quarter and a 9.7% decrease year-over-year.

Segment Performance

The Engineering and R&D Services segment showed particularly strong growth, while the HCL Software segment experienced a slight decline.

Financial Services Growth and Restructuring

HCLTech executives reported strong growth in the financial services sector, attributing this success to recent deals and benefits from vendor consolidation. The company's focus on this sector appears to be paying off, with financial services now accounting for 21.6% of the services revenue, up from 21.1% in the previous quarter.

Additionally, HCLTech announced plans to implement a restructuring program in the current fiscal year. This initiative will affect both personnel and non-personnel areas, potentially aimed at optimizing operations and improving efficiency.

AI and Future Outlook

C. Vijayakumar, CEO & Managing Director of HCLTech, emphasized the company's focus on artificial intelligence, stating, "Our AI propositions are resonating well with our clients and have been augmented further by our partnership with OpenAI." This strategic emphasis on AI capabilities positions HCLTech to capitalize on the growing demand for advanced technology solutions.

Dividend Announcement

The Board of Directors has declared an interim dividend of ₹12.00 per share, marking the 90th consecutive quarter of dividend payout and demonstrating the company's commitment to shareholder returns.

In conclusion, while HCLTech faces some margin pressures, its strong revenue growth, particularly in services and financial sector engagements, along with its focus on AI-driven solutions, positions the company well for future growth in the evolving technology landscape.

HCL Technologies Limited (HCLTech), a leading global technology company, has announced its financial results for the first quarter, showcasing robust performance and an optimistic outlook for the future.

Revenue Growth

HCLTech reported a consolidated revenue of ₹30,349.00 crores for Q1, marking a year-on-year growth of 8.2% in INR terms. In constant currency, the company achieved a 3.7% year-on-year growth. The Services segment, which includes IT and Business Services and Engineering and R&D services, demonstrated particularly strong performance with a 4.5% year-on-year growth in constant currency.

Profitability

The company's EBIT (Earnings Before Interest and Taxes) for the quarter stood at ₹4,942.00 crores, representing 16.3% of revenue. While this shows a 9.2% decrease quarter-on-quarter, it reflects a 3.1% increase year-on-year. Net Income for Q1 was ₹3,843.00 crores, accounting for 12.7% of revenue.

Segment Performance

HCLTech's IT and Business Services segment generated revenue of ₹22,454.00 crores, growing 3.0% year-on-year in constant currency. The Engineering and R&D services segment showed impressive growth of 11.8% year-on-year, with revenue reaching ₹5,174.00 crores. The HCL Software segment reported revenue of ₹2,721.00 crores.

Digital Business and AI Initiatives

The company's digital business continues to thrive, with digital revenue growing 15.2% year-on-year in constant currency and contributing 41.6% of the Services revenue. HCLTech is also making significant strides in artificial intelligence, with its AI propositions resonating well with clients. The company has further augmented its AI capabilities through a partnership with OpenAI.

Client Acquisition and Bookings

HCLTech secured new deal wins with a Total Contract Value (TCV) of $1,812.00 million during the quarter. The company added 8 new clients in the $1 million+ category, bringing the total to 956.

Dividend Declaration

The Board of Directors has declared an interim dividend of ₹12.00 per share, marking the 90th consecutive quarter of dividend payout.

Outlook and Guidance

Based on the strong Q1 performance and positive market outlook, HCLTech has raised its revenue forecast. The company now expects its revenue growth to be between 3.0% to 5.0% year-on-year in constant currency for both overall company revenue and Services revenue. The EBIT margin is projected to be between 17.0% and 18.0%.

C Vijayakumar, CEO & Managing Director of HCLTech, commented on the results, stating, "We had healthy revenue growth of 3.7% YoY supported by good performance in our Services business with 4.5% YoY growth in constant currency. Our AI propositions are resonating well with our clients and have been augmented further by our partnership with OpenAI. Our pipeline continues to grow as the demand environment was stable during the quarter."

With its strong financial performance, focus on digital and AI-led solutions, and an optimistic outlook, HCLTech appears well-positioned for continued growth in the evolving technology landscape.