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HCL Technology, India's third-largest IT services company, reported strong results, beating not only analyst expectations but also those of its peers Infosys and Tata Consultancy.
Key highlights
- Consolidated PAT for the quarter rose by a staggering 226% YoY at Rs 3,593 crores, compared to the last year's Rs 1,102 crores for the same quarter.
- In constant currency, revenue is up 17.5 percent year over year, up 5.0 percent QoQ.
- HCL Tech's revenue increased by 15.1 percent year over year, while adjusted net profit increased by 23.9 percent.
- Consolidated revenues increased by 13.6 percent to Rs 85,651 crore in FY22, compared to Rs 75,379 crore in FY21.
The IT services and ERD (Engineering and Research & Development) businesses contributed to the quarter's revenue growth, while HCL's P&P (Products & Platforms) business declined due to seasonality.
"Our overall growth on a YoY basis stands at 12.7 percent, which is better than the guidance, led by strong momentum in Digital, Cloud, and Engineering services," said C Vijayakumar, Chief Executive Officer, and Managing Director.
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PAT increased by 21.1 percent to Rs 13,499 crore for the full year from April to March, compared to a profit of Rs 11,145 crore in the previous financial year.
HCL is in the middle of the race for revenue collection as the number remains constant for HCL When compared to TCS and Infosys, these figures fall somewhere in the middle. Its bottom line grew at the fastest rate in the industry, but revenue grew at a slower rate.
Infosys reported a 22.7 percent increase in revenue year over year, while TCS reported a 15.75 percent increase. Similarly, Infosys reported a 12 percent increase in net profit year over year, while TCS reported a 7.4 percent increase.
HCL's TCV growth
The total value of new deal wins for the full year FY22 is $8.31 billion, up 14% year on year. On a full-year basis, the ACV (annual contract value) is up 21% YoY.
The total contract value (TCV) of new deal wins was $2.26 billion in the fourth quarter, up 6% year over year. In the quarter, there were ten net new deal wins, with a total value of $2.21 billion for services and $54 million for products.
"In our Services business, we delivered another stellar quarter, with revenue up 5.0 percent QoQ and 17.5 percent YoY in constant currency," said C Vijayakumar, Chief Executive Officer, and Managing Director. "Over the last three quarters, our Services business has grown organically at a rate of 5% and higher, resulting in one of the industry's highest CQGRs," he added.
Attrition rate compared to peers
At the end of March 2022, the company's attrition rate (the rate at which employees left) for the previous twelve months was 21.9 percent. This compares to 19.8% at the end of December 2021 and 9.9% in March of the same year.
During the year, the IT firm hired 39,900 new employees, bringing its total headcount to 208,877. "We continue to invest proactively to build a larger talent pool to meet demand," said Vijayakumar.
When compared to its peers, it had a lower attrition rate than Infosys but a higher rate than TCS, indicating that it was relatively successful in retaining its employees.
In constant currency, the company expects revenue to grow between 12% and 14%, which is in line with this year's actual growth of 12.7 percent. The growth forecast was slightly lower than Infosys' 13-15 percent estimate.
The EBIT margin is expected to be between 18% and 20%, which is similar to the 18.9% reported this year. In FY23, Infosys expects a margin of 21-23 percent.
by Prashant Rana
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