India’s third largest IT services firm HCLTech on July 12 reported 7.6 percent year-on-year (YoY) growth in net profit in the first quarter of fiscal 2024 ended on June 30, 2023. Sequentially, however, net profit was down by 11.2 percent due to ramp downs in deals and verticals like Hi-tech and telecom.
Net profit for Q1FY24 stood at Rs 3,534 crore, missing analyst estimates of Rs 3,782 crore this quarter.
Consolidated revenue for the quarter grew 12 percent YoY at Rs 26,296 crore as compared to Rs 23,464 crore in Q1FY23.
In constant currency (CC) terms, revenue slipped 1.3 percent Q0Q. Last quarter, HCLTech has reduced its YoY revenue growth guidance in CC terms for FY24, to 6-8 percent compared to 12-14 percent in FY22-23.
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EBIT margins or operating margins stood at 16.9 percent in the quarter under review. Earlier the company had given a full-year margin guidance of 18-19 percent for FY24.
Moreover, HCLTech's board of directors declared an interim dividend of Rs 10 per equity share for the financial year 2023-24.
"The record date of July 20, 2023 fixed for the payment of the aforesaid interim dividend has been confirmed by the Board of Directors. The payment date of the said interim dividend shall be August 1, 2023," HCL Tech added.
HCLTech also said that it received 18 large deals in the quarter, with total deal wins worth $1.6 billion. The deal pipeline remained at an all-time high, growing 18% sequentially and 26 percent YoY.
The total headcount as of June end was 2,23,438, down by 2,506 sequentially. The company, however, added 1,597 freshers during the quarter.
“In Q1FY24, our revenue and people strength sequentially moderated in line with the demand environment. These large deals helped offset cuts in discretionary spending in these verticals. We are expecting other verticals to pick up as well shortly,” said C Vijayakumar, CEO and MD HCLTech.
Last quarter, Vijayakumar had told Moneycontrol that he is seeing demand for FY24 coming from customers wanting to be more cost efficient, adopting cloud and bringing more automation to their operations.
Further, Roshni Nadar Malhotra Chairperson HCLTech commented, "HCLTech continues to be a partner of choice for global enterprises and is well placed to leverage opportunities in emerging areas such as Al and allied technologies despite the challenging global macro environment."
Prateek Aggarwal Chief Financial Officer, added, "We have demonstrated healthy client addition with $100mn clients up by 3 and $50mn clients up by 6 on a YoY basis. Our EBIT margin remains stable on YoY basis. Our focus on the ROIC metric continues to move the needle; LTM ROIC end-June 2023 stands at 31.1%, up 260 bps YoY. We continue to demonstrate healthy cash conversion every quarter."
Meanwhile, shares of HCLTech on July 12 closed 0.74 percent lower at Rs 1,106.50 apiece on BSE.
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