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HCL Technologies Ltd. reported marginal growth in profits but strong growth in revenues as its results matched Street estimates, greatly aided by new contracts and new high-value clients.
The company's profits reported a marginal growth of 2.1% YoY to Rs 3,281 crores. However, the company reported an 8.8% QoQ decline in profits as profit for the quarter ended in March 2022 came in at Rs 3,599 crores.
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The revenues for the quarter grew 16.92%, from Rs 20,068 crores last year to Rs 23,464 crores this year. It also reported a 3.8% QoQ growth in revenues. In dollar terms, revenue stood at $3,025 million, up by 1.1% QoQ, and 11.2% YoY while constant currency revenue growth was 2.7% QoQ and 15.6% YoY.
The company's Total Contract Value (TCV) of new deals came in at $2,054 million, as Services had 7 new large deals while Products had 9. The Average Contract Value of the company was 17.9% higher YoY. Mode 2 i.e. Next-generation services (like IoT, Cybersecurity, Cloud Native services, GRC services, etc.) led the growth momentum with a 39.3% YoY growth.
The services business showed robust growth as Europe showed the greatest growth, 22.5%, followed by America at 17.5% and the Rest of the World at 18.2%. The company also improved its client base significantly- 3 new clients worth over $100 million, 5 new clients worth over $50 million, 23 new clients worth $20+ million, 35 new clients worth over $10 million & several others.
"We have started FY'23 on a strong note with an overall growth of 2.7% QoQ and 15.6% YoY in Constant Currency. Our services business continues to have robust growth momentum, growing at 2.3% QoQ and 19.0% YoY in constant currency, driven by our digital engineering and digital application services with cloud adoption being a horizontal theme across all services and verticals” said C Vijayakumar, CEO & MD of HCL Tech.
The company has declared a dividend of Rs 10 per share, making it the company's 78th consecutive quarter of dividend payment. Dalal Street has responded negatively to the results as the stock currently trades around Rs 916.05 per share, down 1.27% today & 6% since the beginning of this week.
Article by Aman Agarwal.
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