HCL Tech, India’s third-largest IT services firm, has released its financial results for the first quarter of fiscal 2024, ending June 30. The company reported a 7.6 percent year-on-year growth in net profit, reaching Rs. 3,534 crore. However, the net profit declined by 11.2 percent sequentially, primarily due to ramp downs in deals and verticals such as Hi-tech and telecom.
Although the net profit figure missed analyst estimates of Rs. 3,782 crore for the quarter, HCL Tech’s consolidated revenue showed a robust growth of 12 percent year-on-year, amounting to Rs. 26,296 crore compared to Rs. 23,464 crore in the same quarter last year.
Despite the challenging global macro environment, Roshni Nadar Malhotra, Chairperson at HCL Tech, expressed confidence in the company’s ability to leverage opportunities in emerging areas such as artificial intelligence (AI) and allied technologies. HCL Tech continues to be a preferred partner for global enterprises.
The company’s earnings before interest and taxes (EBIT) margin for the quarter stood at 16.9 percent, down from 18.25 percent in the previous quarter. However, HCL Tech retained its guidance for FY24, expecting constant currency revenue growth in the range of 6-8 percent and operating margin at 18-19 percent.
To reward its shareholders, HCL Tech’s board of directors declared an interim dividend of Rs. 10 per equity share for the financial year 2023-24. The record date for the dividend payment is set for July 20, 2023, and the payment will be made on August 1, 2023.
During the quarter, HCL Tech witnessed a decrease in its total headcount by 2,506 employees, with the total number of employees standing at 2,23,438 as of June-end. However, the company added 1,597 freshers to its workforce during the same period.
HCL Tech’s Chief Financial Officer, Prateek Aggarwal, highlighted the company’s healthy financial performance, including a 12.1 percent year-on-year revenue growth, stable EBIT margin, and strong cash conversion.
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The focus on the return on invested capital (ROIC) metric has driven positive results, with an LTM ROIC of 31.1 percent, up 260 basis points year-on-year. The company reported operating cash flow of Rs. 3,970 crore and free cash flow of Rs. 3,688 crore, representing 135 percent and 126 percent of net income on an LTM basis, respectively.
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