HCLTech Achieves 5.5% Profit Growth to Rs 4,591 Crore in December Quarter Amid Positive Demand Outlook

HCLTech, an IT company based in Noida, reported a 5.54% increase in consolidated net profit for the December quarter, reaching Rs 4,591 crore. This is up from Rs 4,350 crore in the same period last year. The CEO expressed optimism about improving demand and discretionary spending, leading to an upward revision of revenue growth guidance.

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The company's revenue from operations for the quarter was Rs 29,890 crore, marking a 5.07% increase from Rs 28,446 crore in the previous fiscal quarter. Sequentially, profit and revenue rose by 8.4% and 3.56%, respectively. The CEO attributed this growth to strong performance across various business lines and client confidence in their digital and AI offerings.

Revenue Growth and Market Demand

HCLTech has adjusted its revenue growth guidance for FY25 to 4.5-5%, up from the earlier estimate of 3.5-5%. This includes revenue from the acquisition of HPE CTG assets completed in early December. The CEO noted that there is an improvement in demand and discretionary spending as clients invest in innovation and efficiency.

The IT and business segment contributed the most to revenue at 71.8%, followed by engineering and R&D services. The HCLSoftware business saw an 18.7% quarter-on-quarter growth in constant currency but experienced a 2.1% decline year-on-year.

AI-Led Transformation and New Deals

During the third quarter of FY25, new deal bookings reached USD 2.1 billion, including seven deals from services and five from HCLSoftware. Many significant deals are driven by AI-led transformation, with a strong pipeline across digital application business, engineering, R&D services, and digital process operations.

The CEO highlighted that AI and GenAI are integral to the company's operations. "Some of our largest deals that we signed this quarter are enabled by AI-led transformation," he said. Generative AI is becoming increasingly practical as costs have dropped significantly since early 2023.

Geographical Growth and Workforce Expansion

Both Americas and Europe have shown healthy pipeline growth, nearing all-time highs with numerous large deals across various verticals and service lines. The CEO mentioned that many deals are influenced by AI and GenAI technologies.

HCLTech added 2,134 employees during the quarter, bringing its total workforce to 220,755. An additional 1,000 staff members are expected to join in the March quarter. The Chief People Officer stated that future hiring will focus on specialisation rather than numbers.

Local Hiring Strategy

The company remains minimally dependent on H1B visas as about 80% of its US workforce comprises local hires. "Our dependence on the H1B is one of the least in the industry," said Ramachandran Sundararajan, Chief People Officer.

To mark its 25th anniversary of public listing, HCLTech declared a dividend of Rs 18 per share, including a special dividend of Rs 6 per share. On Monday, the company's stock closed at Rs 1,985.25 on the BSE, down by 0.52% from the previous close.