HCL Tech Q3 results better-than-expected; here are 6 major takeaways for Dalal Street

Jan 13 2024 11:21 AM IST
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HCL Tech on Friday reported better-than-expected earnings for the quarter ended December. While the software major trimmed the upper end of its revenue growth guidance for FY24, it remains confident in the business momentum. HCL Tech bagged deals worth $1.9 billion in the December quarter, with 6 large deals in the services business and 12 in software.

HCL Tech on Friday reported better-than-expected earnings for the quarter ended December, on the back of strong growth in the services and software business.While the software major trimmed the upper end of its revenue growth guidance for FY24, it remains confident in the business momentum.“In an uncertain demand environment, we remain confident of our continued growth momentum enabled by our business mix, our people, and laser-sharp focus on delivering innovation and hyper-automation to our clients,” said C Vijayakumar, MD and CEO at the country’s third largest IT services firm.Here are the major takeaways for Dalal Street investors from the third quarter results of HCLTech.HCL Tech’s consolidated net profit rose 13.5% sequentially to Rs 4,350 crore in the December quarter, and revenue grew nearly 7% to Rs 28,446 crore. Both the bottomline and topline were better than analysts’ expectations of Rs 4,085 crore and Rs 27,959.40 crore, respectively.In constant currency terms, HCL Tech’s revenue grew 6% sequentially in the quarter.Despite good numbers in Q3, HCL Tech trimmed its guidance for the current financial year.The company now sees constant currency revenue growing 5.0-5.5% in FY24, compared to 5-6% guided earlier. This includes revenue recognition from the recently acquired German automotive engineering solutions provider ASAP Holding. The board has recommended an interim dividend payout of Rs 12 per share. The company has fixed January 20 as the record date to determine eligible shareholders for the dividend payout.HCL Tech bagged deals worth $1.9 billion in the December quarter, with 6 large deals in the services business, and 12 in software.The software major is confident of sustaining the growth momentum, led by a good business mix.The consolidated operating margin expanded a sharp 130 basis points sequentially to 19.8%. For the second straight quarter, HCLTech saw an expansion in margins.It has retained operating margin guidance at 18-19% for the full year.At a time when IT majors Tata Consultancy Services, Infosys, and Wipro saw a drop in the total employee headcount in the December quarter, HCLTech reported net addition of 3,617 employees.As of December-end, the total headcount in the company stood at 2,24,756.The company added 3,818 freshers in the last quarter, compared to 3,630 in the September quarter.Like peers, HCLTech too, saw a sharp drop in the attrition levels. As of December, the attrition rate came down to 12.8% on an LTM basis, from 14.2% a quarter ago. Attrition levels came down for the fourth straight quarter. (Subscribe to ETMarkets WhatsApp channel)

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