HCL Tech Q1 Results Highlights: HCL Tech posts 6.7% YoY jump in revenue at ₹28,057 crore, dividend announced

• Top 5 clients contribute 11.4%
• Top 10 clients contribute 19.6%
• Top 20 clients contribute 30.1%

• In terms of geographical contribution to the business, America was the top contributor at 66%, which grew by 8% YoY in cc growth. Followed by Europe at 27.9% and RoW at 6.1%.
• Banking & Financial Services continued to remain top contributor to the revenue at 21.0%, followed by Manufacturing (19.4%), Life sciences (15.9%), Technology and services (13%) , Telecommunications Media & Publishing entertainment (12.2%), Retail (9.4%) and Public services (9%).
• Out of all major segments, manufacturing, Technology & Service and Telecommunication saw increment in revenue, while BFSI & Lifescience and Healthcare witnessed decline in revenue.

• HCL Tech's last twelve-month (LTM) attrition rate at 12.8%

• Net headcount addition at 8,080 in Q1, added 1,078 freshers

• Total people count at 219,401

• The total revenue increased 5.8% in constant currency terms.
• EBIT margins for the quarter contracted by 500bps at 17.1% against 17.6% in Q4FY24.
• The net income margin for the quarter jumped 1200 bps at 15.2% against 14% in Q4FY24.

C Vijayakumar, CEO and Managing Director, said, “We are pleased to report another quarter of industry-leading performance with 5.6 % YoY revenue growth on a constant currency basis. Our Q1 Revenue and EBIT performance was slightly better than our expectations. We clocked in $2B TCV of new business Bookings. We are confident of decent growth in the coming quarters, positioning us well to deliver our revenue guidance for the year as clients continue to spend on GenAI and other emerging technologies.”

• The company expects revenue growth to be between 3.0% - 5.0% YoY in terms of constant currency (CC)

• EBIT margin to be between 18.0% – 19.0%

• HCL Tech reported a 20% yoy jump in net profit of Q1FY25 at ₹4,250 crore vs ₹3,531 crore in Q1FY24.

• The total revenue for the quarter also increased by 6.7% YoY at ₹28,057 crore.

• New deal wins at $1,960 million

• The company also announced dividend of ₹12 a piece and fixed record date as July 23 for the same

• Closing price: ₹1,561.7 (+3.3%)
• High: ₹1,566
• Low: ₹1,510.5
• Total market capitalisation: ₹4.23 lakh crore
• Traded value: ₹997 crore

• Shiv Nadar, Founder
• Roshni Nadar Malhotra, Chairperson
• C Vijayakumar, CEO and Managing Director
• Shikhar Malhotra, Director
• Robin Ann Abrams, Independent Director
• R Srinivasan, Independent Director
• Dr Sosale Shankara Sastry, Independent Director
• S Madhavan, Independent Director
• Thomas Sieber, Independent Director
• Nishi Vasudeva, Independent Director
• Deepak Kapoor, Independent Director
• Dr Mohan Chellappa, Independent Director
• Simon John England, Independent Director
• Vanitha Narayanan, Independent Director
• Bhavani Balasubramanian, Independent Director
• Lee Fang Chew, Independent Director

• Current price: ₹1,562.1 (+3.3%)
• Open: ₹1,530
• High: ₹1,564.1
• Low: ₹1,510.5
• Previous close: ₹1,511.9

HCL Tech posted a flat revenue on Q-o-Q basis at ₹ 28,499 crore for the March quarter of FY 2023-24. On a yearly basis, revenue grew by 7.1%. It had posted revenue of ₹26,296 crore in Q1FY24.

On a constant currency basis, services revenue was up 3% QoQ led by growth in telecommunications, media, publishing and entertainment.

The IT major reported net profit of ₹ 3,986 crore for the March quarter, down by 8.4% QoQ. Its net profit was ₹3,534 crore in Q1 of FY24. The company reported new deal wins of $2.290 billion in the last quarter of FY2024.

Investors will also focus on management commentary about the current fiscal and growth prospects in the key US market. Experts believe the company to retain revenue growth guidance of 3%-5% and 18%-19% EBIT margin projection for FY2025. The management commentary on banking vertical, client discretionary spend and cost takeout projects will also be viewed.

Investors will watch out for new deal wins as the company has disappointed on this count in the previous financial year. Except for $2.1 billion deal with Verizon, the deal flow was slower in FY24. HCL Tech reported a 10% growth in new deal wins at $9.759 billion in FY2024, including 73 new large deals – 36 in services and 37 in software. The company is expected to announce new deal wins of $2.5 billion in the first quarter.

According to experts, HCL Tech may face margin pressures in the first quarter. They expect the company to take a 60-70 basis point hit on margins on a sequential basis and 10 basis points on a yearly basis due to annual productivity benefits to clients. HCL Tech has given EBIT margin guidance of 18-19% for FY25.

Experts predict the company will report a 2% quarter-on-quarter decline in revenue in the April-June period because of the offshoring of a large contract and the usual annual productivity benefits to clients on renewals.

Analysts believe the company to report revenue between ₹27,900 crore and ₹28,034 crore in the June quarter, up by 6-7% year-on-year but down by 1-2% on a quarterly basis. Net profit is expected in the range of ₹3,714-₹3,770 crore.

HCL Tech has provided revenue growth guidance of 3-5% on a constant currency basis for FY2025, and investors will be keen to see if Q1 numbers match the projections.

According to analysts, the company's net profit is likely to rise 6% year-on-year (YoY) to ₹3,745 crore. Revenue is also expected to jump 6.5% to ₹27,997 crore.

Apart from HCL Tech, other companies that will release their Q1 report card today include Indian Renewable Energy Development Agency (IREDA), Oriental Hotels, Vipul, Atharv Enterprises, Gautam Gems, Teamo Productions and Indo Cotspin.