HCLTech Q2 results: Net profit jumps 9.92% YoY to Rs 3,833 crore; revenue grows 8%

Representative image

India’s third largest IT services firm HCLTech on October 12 reported 9.92 percent year-on-year (YoY) growth in net profit in the second quarter that ended on September 30, 2023.

Sequentially, net profit was up 8.55 percent driven by a robust deal pipeline reported this quarter.

Net profit for Q2FY24 stood at Rs 3,833 crore, beating  Moneycontrol’s poll estimates of Rs 3,750 crore this quarter, growing at 6.14 percent QoQ.

Moreover, consolidated revenue for the quarter grew 8 percent YoY at Rs 26,672 crore as compared to Rs 24,686 Crore in Q2FY23. This was slightly below Moneycontrol’s estimates of revenue is likely to grow 2.3 percent quarter-on-quarter to Rs 26,909 crore.

In constant currency (CC) terms, revenue grew 1 percent QoQ.

HCLTech has reduced its YoY organic revenue growth guidance in CC terms for FY24, to 4-5 percent, which was previously 6-8 percent.

EBIT margin or operating margin stood at 18.5 percent in the quarter under review, as compared to 17 percent in Q1FY24. Earlier the company had given a full-year margin guidance of 18-19 percent for FY24.

HCLTech's board of directors declared an interim dividend of Rs 12 per equity share for the financial year 2023-24.

Deal total contract value (TCV) stood at $3.96 billion -- the company's highest quarterly net new deal wins -- a significant jump from $1.56 billion last quarter, which came after seven consecutive quarters of maintaining $2 billion-plus in deal wins.

C Vijayakumar, CEO and MD, HCLTech said,"Our revenue growth of 1.0% QoQ and 3.4% YoY on a constant currency basis, with a 154 bps QoQ improvement in operating margin and improving cashflows, reflect our ability to execute well in an evolving business environment and our commitment to operational efficiency."

He added, "Our new bookings of $ 4 billion this quarter is at an all- time high, driven by a standout mega deal. This achievement underscores our ability to seize exceptional opportunities in the market and gives us optimism for our medium-term growth prospects."

HCLTech has won some very large deals in Q2 including a $2.1 billion deal with Verizon Business. The company also completed acquisition of German automotive engineering services provider ASAP Group, which is expected to start reflecting in the revenue growth from this quarter onwards.

In an interview with Moneycontrol post Q1 earnings announcement, Vijayakumar had said, “We have a very strong pipeline. From last quarter, also the pipeline increased and even in this quarter our pipeline continues to increase. It's at an all-time high. We expect it to be a good booking in this quarter, which I think will help us continue to have better growth sequentially from here on, which leads us to meet the 6-8 percent (CC revenue growth) guidance for the year.”

Meanwhile, shares of HCLTech on October 12 closed 1.74 percent lower at Rs 1,224.05 apiece on BSE.