HCL Tech Q2 Results: Margin At Lower End Of Guidance, Revenue Grows 3%
The company's revenue grew 3% sequentially in the quarter ended September to Rs 20,655 crore.
HCL Technologies Ltd.’s revenue rose meeting estimates as it won a higher number of deals with clients going digital during the pandemic. However, margins continued to remain under pressure owing to the impact of salary hikes.
Revenue grew 3% sequentially in the quarter ended September to Rs 20,655 crore, according to its exchange filing. That compares with the Rs 20,971.8-crore consensus estimate of analysts tracked by Bloomberg.
Revenue in dollar terms rose 2.6% to $2,791 million.
Key Highlights
Net profit rose 1.6% sequentially to Rs 3,265 crore. Analysts had expected Rs 3,202.6 crore.
EBIT fell 0.4% to Rs 3,916 crore.
Margin narrowed to 19% from 19.6% in the previous quarter.
The software services provider kept its revenue and margin outlook unchanged for the ongoing fiscal. It expects revenue to grow in double digits in constant currency in FY22, while EBIT margin is forecast to be between 19.0% and 21.0%.
The company won new contracts worth $2,245 million with a net of 14 new large deals during the quarter. It also added a net of 11,135 new employees.
"Our net employee addition hit an all-time high of 11,135 this quarter," Chief Executive Officer and Managing Director C Vijayakumar was quoted as saying in a media statement. "Our robust pipeline and continued strong employee ramp up augurs well for our business momentum going forward.”
HCL Tech’s industry peers Tata Consultancy Services Ltd., Infosys Ltd. and Wipro Ltd., too saw their quarterly earnings rise, driven by large deal wins.
The board of HCL Tech has also declared an interim dividend of Rs 10 per equity share for FY22. It will be paid out on Nov. 8, 2021.
Shares of HCL Tech closed 1.17% lower ahead of the earnings announcement, while the benchmark BSE Sensex ended 0.94% up.