HCL Technologies Q4 Results: Profit Rises 4% Despite Covid-19 Outbreak
HCL Technologies Ltd.’s profit rose and margin expanded in the quarter ended March at a time the new coronavirus pandemic upended economies worldwide and disrupted trade.
The software services provider’s net profit rose 3.9 percent sequentially to Rs 3,154 crore in the January-March period, according to an exchange filing. That compares with the Rs 2,884-crore consensus estimate of analysts tracked by Bloomberg.
Revenue in terms of U.S. dollars remained flat at $2,543 million against the $2,550-million estimate. In rupee terms, the top line rose 2.5 percent to Rs 18,590 crore. That compares with the estimated Rs 18,473 crore.
Earnings before interest and tax margin grew to 20.9 percent from 20.2 percent in the preceding quarter.
While the result, up till March, doesn’t show a complete impact of the coronavirus pandemic, the company had earlier indicated that its fourth quarter financials will get affected by the outbreak.
HCL Tech attributed the quarter’s strength to its quick response to the virus outbreak. “We kicked off the pandemic response and business continuity plan within 24 hours of coming to know of the first human-to-human transmission outside China on Jan. 26,” Chief Executive Officer and President C Vijaykumar said. “With meticulous execution and effective governance, we were able to get our employees to work from home well before the lockdowns came in place.”
In contrast, HCL Tech’s larger peers such as Infosys Ltd. and Tata Consultancy Services Ltd. reported a decline in bottom line in the fourth quarter as the Covid-19 pandemic shut businesses across the globe. While Infosys temporarily suspended its practice of providing growth guidance, TCS expects its revenue to contract in the ongoing financial year.
While HCL Tech, too, has not provided an annual guidance this time, Vijaykumar expects the second half to be better than the first. Instead of focusing on revenue and profit, the company’s priorities for now lie in continuing working with customers and help them in this time while keeping employees motivated and engaged, he said.
Shares of HCL Tech rose as much as 4.5 percent to Rs 542.4 apiece after the results were announced compared with a 0.38 percent drop in the benchmark Nifty 50 Index.
Watch | HCL Tech CEO C Vijayakumar And CFO Prateek Aggarwal On Covid-19 Impact And Future Growth Drivers