In the first quarter of FY24, HCL Technologies had a combined net profit of 3,534 crore, which was up by 7.65% from the same time last year. All of the tech player’s street predictions were wrong. In the same quarter a year ago, the company had a PAT of 3,283 crore. The company has also said that each share will get a 10 payout.
But HCL Tech’s profit after taxes (PAT) fell by 11.27% in Q1FY24 compared to the previous quarter, when it made a profit of 3,983 crore.
In the top-line front, the same pattern was seen. In Q1FY24, the total income from operations jumped by 12.06%, from 23,464 crore to 26,296 crore. However, sales dropped by 1.2% from the previous quarter.
In Q1FY24, HCL Tech’s IT and business services brought in 19,642 crore in income, which was up by 15.06% year over year. While revenue from engineering and research and development services grew by 3.66% YoY to 4,047 crore and revenue from HCL software grew by 4.7% YoY.
The company’s board of directors met on Wednesday and decided to pay an interim payment of 10 per share with a face value of 2 for the financial year FY24. The July 20, 2023, record date will be used to figure out who can get the reward benefits. While the interim dividend is due to be paid on August 1, 2023.
The Q1 numbers will affect HCL Tech shares on Thursday. During Wednesday’s trading on BSE, each share of stock finished the day at 1110.05, which was a small drop of 0.42 percent.
Moving on, the company’s EBIT for the quarter under review was 4,460 crore, which was down by 7.8% QoQ but up by 11.7% YoY. In Q1FY24, the EBIT margin for IT and business services was 16.1%, and the EBIT margin for engineering and R&D services was 16.8%. This is down from 17.1% and 18.8% in the previous quarter. Overall, the EBIT margin for services fell from 17.4% in Q4FY23 to 16.2% in Q1FY24. Also, the EBIT margin for HCL Software was 22.9%, down from 23% in Q4FY23.
Using the same currency, sales were down by 1.3% from quarter to quarter but up by 6.3% from year to year. The revenue was $3.20 billion, which was down 1.1% from the previous quarter but up 5.8% from the previous year. The number of clients with more than $100 million rose by 3% YoY, and the number of clients with more than $50 million rose by 6% YoY.
In the first quarter of FY24, HCL Tech got 18 big deals. Seven of these deals were for services, and the other 11 were for software. The company had won $1,565 million in new deals, which was called its TCV. Even though the pipeline as a whole is at its highest level ever, grew by 17.7% QoQ and 26.2% YoY.
C. Vijaykumar, the company’s CEO and Managing Director, said, “In Q1FY24, our sales and staffing levels changed in a way that matched the demand environment.”
“We experienced double-digit YoY growth, fueled by large deals, in our largest verticals, financial services, manufacturing, and life sciences and healthcare,” he continued. These big deals helped make up for the fact that clients in these areas had less money to spend on extras.
In the first quarter of FY24, HCL Tech let go of 2,506 workers. This brought the total number of employees down to 223,438 from 225,944 in the fourth quarter of FY23. In the June quarter of last year, there were 210,966 people working at HCL. Also, HCL Tech’s long-term employee loss rate fell by 7.5% year-over-year to 16.3% in Q1 of the current fiscal year.
Roshni Nadar Malhotra, the chairperson, said, “Despite the tough global macro environment, HCL Tech continues to be a partner of choice for global enterprises and is well positioned to take advantage of opportunities in emerging areas like AI and related technologies.”
Vijayakumar also said, “We expect other verticals to pick up soon as well.” This, along with the strength of our record-high supply, lets us keep our forecast for the year.”
In constant currency terms, HCL Tech’s full-year FY24 forecast says that the company’s sales should grow by between 6% and 8% year over year. Also, the rise of CC’s services revenue is expected to be between 6.5% and 8.5% YoY. For the fiscal, it is thought that the EBIT margin will be between 18% and 19%.