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HCL Tech beat market estimates; top 8 highlights of Q3 FY21 scorecard

HCL Tech's revenue crossed the $10 billion milestone in the year 2020, delivering 3.6 percent YoY growth in constant currency.

January 15, 2021 / 11:41 AM IST

Domestic IT player HCL Technologies on January 15 reported a 26.7 percent quarter-on-quarter (QoQ) and 31.1 percent year-on-year (YoY) rise in the consolidated net income for the quarter ended December 31, 2020, at Rs 3,982 crore.

Revenue at Rs 19,302 crore was up 3.8 percent QoQ and up 6.4 percent YoY.

HCL Tech's revenue crossed the $10 billion milestone in the year 2020, delivering 3.6 percent YoY growth in constant currency.

The company's cash EPS at Rs 62.2 and EPS at Rs 48.7 grew at a healthy clip of 27.9 percent and 26 percent respectively during CY 20.

Digital and cloud segments contributed significantly to the company's Q3 numbers.


"We posted a strong financial performance in Q3FY21 with a constant currency revenue growth of 3.5 percent sequentially and 1.1 percent YoY and an EBIT of 22.9 percent. This solid performance was driven by robust momentum in our Mode 2 and Mode 3 businesses led by digital, cloud and products & platform segments," said C Vijayakumar, President & CEO, HCL Technologies.

"Our results reflect the success of the strategic investments we have made over the years including unique ecosystem constructs with all Cloud Hyperscalers, organic and inorganic investments in a broad-based IP and platforms portfolio and an enterprise digital transformation value proposition that is truly integrated and differentiated," he said.

Read more: HCL Tech Q3 profit jumps nearly 27% to Rs 3,982 crore

Here are 8 key takeaways from the company's December quarter scorecard:

Numbers beat estimates: HCL Tech's profit, revenue, EBIT and EBIT margin, all beat market expectations.

HCL Tech reported Q3FY21 profit at Rs 3,982 crore, revenue at Rs 19,302 crore, EBIT at Rs 4,416 crore and EBIT margin at 22.9 percent.

On the other hand, a CNBC-TV18 poll had estimated HCL's profit to the tune of Rs 3,201 crore, revenue at Rs 19,115 crore, EBIT at Rs 4,049 crore and EBIT margin at 21.2 percent.

Growth story to continue: HCL Tech expects its revenue to grow between 2-3 percent QoQ in constant currency for Q4FY21, including DWS contribution. EBIT, as per the company's estimates, is expected to be between 21-21.5 percent for FY21.

Geography: Among the geographical markets, Europe saw a decline of 1 percent YoY in CC revenue. However, in QoQ terms, it was up 6.3 percent.

CC revenue from the Americas grew 2.2 percent YoY and 3.2 percent QoQ. Revenue from the rest of the world (ROW), saw a decline of 4.5 percent QoQ while it was flat in terms of YoY.

CC revenue in Segments: Products and platforms stole the limelight, rising 9.3 percent YoY and 8.3 percent QoQ in CC revenue terms. IT and business services, too, grew 1.1 percent YoY and 2.7 percent QoQ.

However, CC revenue from engineering and R&D services declined 5.1 percent YoY but grew 2.5 percent QoQ.

CC revenue in Verticals: Technology and services, life sciences & healthcare showed healthy growth YoY.

In terms of CC revenue, the technology and services segment grew 20.2 percent YoY and 6.8 percent QoQ.

Lifesciences & healthcare grew 13.3 percent YoY but it remained flat QoQ. The manufacturing vertical saw a 13.1 percent YoY decline in CC revenue but grew 5.6 percent QoQ.

The retail & CPG segment's revenue grew 3 percent YoY and 3.7 percent QoQ.

The financial services segment's revenue remained under pressure as it fell 0.5 percent YoY and 0.4 percent QoQ.

Headcounts: As of December 31, 2020, HCL Tech’s full-time headcount stood at 1,59,682 and the localisation in the US is 69.8 percent.

Deal wins: HCL said it had won 13 transformational deals across industry verticals, including life sciences and healthcare, technology and financial services.

Dividend: The company extended its tradition of dividend payout. It declared a dividend of Rs 4 per share, being the 72nd consecutive quarter of dividend pay-out.
Moneycontrol News
first published: Jan 15, 2021 11:41 am

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