HCL Technologies Q4 Results: Record Deal Wins, Profit Tumbles 72% On Higher Tax Expense
HCL Technologies Ltd.’s revenue rose and it won record new deals in the fourth quarter even as profit tumbled on a higher tax expense.
Net profit declined 72.1% quarter-on-quarter to Rs 1,111 crore, the software services provider said in an exchange filing. That compares with the Rs 3,230-crore consensus estimate of analysts tracked by Bloomberg. HCL Tech’s tax expense surged to Rs 2,256 crore from Rs 502 crore in the December quarter.
- Revenue rose 1.75% sequentially to Rs 19,641 crore compared with Rs 19,878-crore consensus forecast of analysts tracked by Bloomberg.
- Revenue in dollar terms rose 3% to $2,696 million, against the $2,712-million estimate.
- Constant-currency revenue growth stood at 2.5%.
The company registered the “highest-ever new deal booking” this quarter at $3.1 billion with an all-time high exit pipeline, said C Vijayakumar, chief executive officer at HCL Technologies. “The booking and pipeline represent a well balanced mix of service lines, geographies and industries.”
HCL Technologies expects revenue in FY22 to grow in double digits in constant currency terms. It expects EBIT margin for FY22 to range between 19% and 21%.
- EBIT margin contracted to 17.95% in January-March from 22.98% in the quarter ended December.
- Operating profit declined 20.53% to Rs 3,526 crore.
The board declared an interim dividend of Rs 6 per equity share and a special interim dividend of Rs 10 per equity share for FY 2021-22. The special interim dividend was declared in recognition of the $10 billion in yearly revenue milestone in FY21.
The company had announced a Rs 700-crore one-time bonus in February to celebrate the milestone.
HCL Technologies’ peers Tata Consultancy Services Ltd. and Infosys Ltd., too, saw their revenue rise in the reported quarter, aided by deal wins and digital transformation. Their net profit also increased during the period. TCS has maintained a double-digit growth guidance for FY22, while Infosys expects revenue to grow 12-14% in constant currency terms in the ongoing fiscal.
Shares of HCL Tech closed 0.56% lower before the results were announced compared with a 0.45% fall in Nifty50.