HCL Technologies Q4 net profit more than triples, revenue up 15%

IT major HCL Technologies Ltd on Thursday reported a consolidated net profit of Rs 3,593 crore for the fourth quarter ended March 2022, up a staggering 226% from the Rs 1,102 crore it had clocked in the same period last year.

For the financial year 2021-22, however, HCL reported a modest 4.3% growth in the net profit to Rs 13,499 crore. Revenue growth for the year was more impressive at 13.6%, with the company clocking Rs 85,651 crore in sales.

HCL’s quarterly net profit beat most analysts’ expectations. Most had predicted the company will clock a net profit in the vicinity of Rs 3,350 crore. 

HCL said its revenue from operations during the fourth quarter was at Rs 22,597 crore, up 15% over the previous year’s fourth quarter figure of Rs 19,641 crore. 

While HCL’s EBITDA margin for the whole year was 24%, the figure for the fourth quarter came in at 22.3%. 

The IT major said that in the current financial year, it expects revenue to grow between 12-14% and expects an EBIT margin of between 18-20%. 

While the services segment saw a 17.5% growth during the fourth quarter at constant currency basis, the products and platforms segment saw a 13.9% decline in the same period, on a constant currency basis. 

Other key highlights

1) FY22 revenue growth at 12.7% year-on-year (YoY) at constant currency basis.

2) Services revenue crossed the US$10 billion milestone and registered a growth of 14.9% YoY in constant currency for FY22.

3) Engineering and R&D services grew at 3.9% quarter-on-quarter in constant currency and 23.7% year on year, owing to traction in digital engineering and IoT works.

4) Geography-wise, growth was led by Europe (13.6%), Americas (13.0%) and Rest of the World (15.0%).

Management commentary

HCL said that its growth momentum was led by verticals like telecom, media publishing and entertainment, which together grew 20.2% during the quarter and life sciences and healthcare which saw a growth of 18.5%. 

Other verticals from which the company saw its business growth were manufacturing (16.6%), technology and services (14.3%), and financial services (10.2%).

HCL said that during the last financial year its headcount went up 23.6% to 2,08,877 employees, as it added 39,900 people to its workforce. During the fourth quarter, it added 11,100 people, the company said.

“We have delivered yet another stellar quarter in our services business, where the revenue is up 5.0% QoQ and up 17.5% YoY in constant currency,” said C Vijayakumar, CEO and Managing Director, HCL Technologies Ltd.

“Over the last three quarters, our services business has been consistently growing organically at 5% and higher, delivering one of the highest CQGR in the industry. Our overall growth on YoY basis stands at 12.7% which is better than the guidance led by strong momentum in Digital, Cloud and Engineering services,” he said.