HCL Tech Q3 Results: Cons PAT Rises 13.51% QoQ To Rs 4,350 Crore On Highest Ever EBIT, Revenue Up 7%

Shiv Nadar's HCL Technologies is a rising star amidst prevailing challenges in macro conditions for the IT sector. HCL in its third quarter of FY24, reported a consolidated net profit of Rs 4,350 crore, registering a growth of 13.51% from a net profit of Rs 3,832 crore in Q2FY24 and also up by 6.20% from Rs 4,096 crore in Q3FY23. Rupee and constant currency revenue growth were better than peers and ranged from 6-7%.

In Q3FY24, the company's rupee revenue was at Rs 28,446 crore on a consolidated basis, rising by 6.65% QoQ and 6.54% YoY. In dollar terms, revenue stood at $3,415 million, up by 5.9% QoQ and 5.3% YoY. Meanwhile, constant currency revenue growth was at 6% QoQ and 4.3% YoY.

Further, HCL's services constant currency revenue came in at 3.1% QoQ and 4.2% YoY growth driven by telecommunications, media, publishing and entertainment business which rose by 25.9% QoQ.

HCL's services revenue crossed an annual run rate of $12 billion or approximately Rs 1 lakh crore. Digital constant currency revenue was up by 5% YoY, contributing 37.7% to the services segment.

Additionally, HCL's growth powered by HCLSoftware CC Revenue was up by 5% YoY.

C Vijayakumar, CEO and MD said, "Our results this quarter have been remarkably strong with a revenue growth of 6% QoQ in CC driven by strong momentum in both services and software businesses. We delivered a stellar operating margin of 19.8%, a 126 bps improvement QoQ and 16 bps improvement YoY."

Also, Prateek Agarwal said, "HCL Tech delivered a stellar quarter with sequential growth driven by HCLSoftware, a spurt in the Telecom vertical and ER&D Segment. Our services revenue has crossed a significant milestone of $12 billion (Rs 1 lakh crore) on a run rate basis. We also delivered the highest ever EBIT of Rs 5,615 crore (7.4%), and net profit of Rs 4,350 crore (up 6.2% YoY) this quarter."

Further, Aggarwal added, "LTM Return on Invested Capital (ROIC) stands at solid 32.8% for the company (up 301 bps YoY). Cash conversion (on an LTM basis) continues to be healthy with OCF/NI at 142% and FCF/NI at 135%."

In the bottom-line case, EBIT came in at Rs 5,615 crore, registering a growth of 13.8% QoQ and 7.4% YoY.

The company's TCV (new deal wins) stood at $1,927 million. In the quarter, HCL won 18 large deals, of which, 6 deals belonged in services and 12 in the software section.

Going ahead, Roshni Nadar Malhotra, Chairperson of HCL Tech said, "We continue to execute efficiently with our differentiated portfolio and enable global enterprises agendas."

She said HCL remains committed to scaling its ESG initiatives and helping its clients achieve their sustainability goals through technology.

Meanwhile, Vijayakumar said, "We continue to invest in AI, specifically Generative AI as well as cloud-native capabilities across our products and services to address evolving client needs."

In an uncertain demand environment, Vijayakumar said HCL remain confident of its continued growth momentum enabled by its business mix, people and laser-sharp focus on delivering innovation and hyper-automation to its clients.

On BSE, HCL's share price ended at Rs 1,543 apiece, up by 3.85% with a market cap of Rs 4,18,718.52 crore on Friday.