HCL Tech Q1 net profit surges 20.4% to Rs 4,257 cr

For the fiscal's first quarter ended June 2024 (Q1 FY25), the revenue came in at Rs 28,057 crore, 6.6 per cent more than in the year-ago period.

Seen sequentially, it was 1.6 per cent lower than the March quarter.

HCLTech CEO and MD C Vijayakumar said the Q1 revenue and EBIT (earnings before interest and taxes) performance was "slightly better than our expectations".

He said Q1 has been a seasonally soft quarter for HCLTech, but affirmed that the Noida-headquartered tech major will achieve its annual growth guidance.

"We stay with our full-year guidance of 3-5 per cent growth in constant currency.

"In the first quarter, we have done better than what we had anticipated.

"In the second quarter, we are confident of positive growth in spite of the revenue from State Street divestment going away, we will grow.

"We will grow across all geographies and verticals, except financial services," he said at the company's press conference.

Despite the impact of divestiture, Vijayakumar said HCLTech remains comfortable with its full-year revenue and margin guidance, "as clients spend on GenAI and other emerging technologies".

"We expect to meet the guidance through strong operational execution that we have demonstrated over the past several years," he said.

HCLTech chairperson Roshni Nadar Malhotra said that with the future-ready portfolio, the company is well-placed to tap emerging opportunities led by GenAI.

"We remain committed to doing business sustainably and responsibly as we continue to supercharge progress for our clients," she said.

HCLTech expects a muted discretionary spending environment and remains cautious, Vijayakumar added.

HCLTech's headcount at the end of the first quarter of FY25 stood at 2,19,401, down 3.6 per cent sequentially.

The CEO said a huge part of the reduction in headcount is attributed to the State Street joint venture exit.

HCLTech chief people officer Ramachandran Sundararajan said the firm plans to hire about 10,000 professionals this year.

LTM (last twelve months) attrition came in at 12.8 per cent, down 16.3 per cent year-on-year.

The Americas brought in the largest share of revenue (64.5 per cent) on a year-on-year constant currency growth of 8 per cent, followed by Europe (28.7 per cent).

Telecommunications-media and retail-CPG verticals fared well, witnessing 69.2 per cent and 9.7 per cent year-on-year growth in constant currency, respectively.

Vijayakumar said the company sees "tremendous opportunities" in the telecom space, and expects to grow on the vertical.

Growth in the financial services segment saw a decline of 1.3 per cent annually.

"Moving forward, we continue to see a lot of cost optimisation deals, and we continue to see modernisation and technology transformation kind of opportunities, which will result in significant efficiencies for our customers," Vijayakumar said.

He said the company expects that Q2 will be a declining quarter for financial services because of State Street divestiture revenue going out, but exuded confidence of sequential growth in financial services post the second quarter.

"Given that spend in financial services is still the largest, we expect it to remain the company's largest segment," he noted.

HCLTech declared an interim dividend of Rs 12 per equity share of Rs 2 each for 2024-25.

HCLTech's shares settled at Rs 1560.40 apiece on BSE on Friday, up 3.20 per cent from the previous close.